Apple Watch does not track steps at a standing desk with treadmill

Is anyone else experiencing the issue where they have a standing desk with a treadmill underneath and the apple watch prevents the iphone from tracking steps?

Here are my tests.

iPhone in my pocket, not wearing watch. Tracks 1k steps in 10 minutes.

iPhone in my pocket, wearing watch. Not only did it not track my steps, it removed the steps from the previous test.

I understand it would be difficult for the Apple watch alone to track steps since the hand would be static. But it has to be smart enough to know that the iPhone is tracking steps and to override it.

Another complaint is that when I walk 10k steps with my iPhone, and the data is saved to the Health app, my apple watch still shows the rings as not being closed. To some, it may be trivial since I know how many steps I got in, but if the apple watch is trying to "gamify" activity, then do it right!

Thanks!

Craig