Hi Niko,
I was having the same issue and didn't want to factory reset my phone either. So, I kept trying out different things and actually managed to get the app completely erased and then redownloaded successfully, without doing a complete erase and reset of my phone!! I'll share with you the steps that I took and hopefully this works for you too! I'm thinking the issue might be what lam_serge said below.. not having my phone updated to the latest IOS software 14.3 when I paired my watch. If that is the cause, then hopefully Apple fixes the issue because that is ridiculous! Hope they fix it permanently either way. Anyway, see what I did below.
- On the watch go to settings > general > reset > Erase All Content and Settings
- Go to your Bluetooth settings on your phone and if you see your Apple Watch, click on the 'i' and click "Forget this device"
- Go to "appleid.apple.com", scroll down to devices and you should see your apple watch. Click your apple watch and select "Remove from account".
- Next you will need to turn off "Find my iPhone", which should turn off activation lock on the watch. On your phone go to settings > click your name > Find My > Find My iPhone > toggle this off
- Next step (not sure if necessary) is to go go settings > general > iPhone storage > scroll to the Watch app and "Remove all backups". I saw someone do this somewhere else, saying that there might be corrupt files in the backups, so removing them might be a good idea. If you do have a backup and want to try without this step, it might still work, just wanted to mention this.
- These next steps have to be done kind of quickly. What I did next was do a Hard reset of my phone (quickly press volume up > quickly press volume down > press and hold side button until Apple logo appears and then release side button). Once the phone turns back on, you should have enough time to be able to get into the app and then unpair the watch, but you have to do this super quickly before the app kicks you out. Make sure your app is on the first screen once you unlock your phone, because you don't have much time from when the phone turns on from the hard reset to when the app will fail.
- Next, go into the app, and once loaded, quickly press "All Watches" in top left screen > Click the 'i' next to your watch > then click "Unpair Apple Watch". Because you turned off Find my iPhone in the previous step, this should have turned off the activation lock, so you shouldn't have to type in your Apple ID password.
- After you click "Unpair Apple Watch", you should see a screen where it shows it is unpairing your watch. Once I got to this point, the app didn't kick me out and I was successfully able to unpair my watch.
- After the unpair is completed, go back to your apps and you should have the ability to completely delete the Watch app. First remove the app from your home screen and then completely delete the app from the app library.
- After you have deleted the app, you can go back to the app store and download it again and you will be able to get into the app and start over with your watch.
So far my watch and the app seem to be working fine. It's only been about an hour, but so far so good. I really hope this works for you and others! I'd be curious to know if this works for you, or if I can explain anything better. I feel bad for all these people who are having this frustrating issue!