Apple Watch series 3 won’t update/pair

Updated iPhone XR to iOS 14.1 and now my watch did a factory reset and says to update the watchOS. Immediately my phone gets the notification to pair a new watch( I only have the one). I go through the steps to set the watch back up when it gets to the update screen and says ‘watchOS 6.1.3 is up to date’. The only option I have is to cancel which will end the ‘update’ and reset the watch AGAIN. It may be a software issue or that my watch is too old but this is unacceptable.

additional information:

have had phone and watch for over a year now.

watch has never been paired with another phone

and watch has never been reset before