Microphone on Apple watch

I just received my Apple Watch SE and I want to do voice to text but the microphone on the watch is not lit up.

What I have tried so far:

I have made sure Siri is enabled, dictation is enabled and there are no restrictions.

I have restarted both my phone and my watch.

I have checked for software updates, of which my phone had to be updated from 14.6 to 14.7 and my watch came out of the box needing and update and both are complete.

Since the updates, both devices have been restarted twice with no luck.

A call to Apple support suggested it may be a hardware issue. What do you think?