Apple Watch and IPhone 13

I have recently purchased the IPhone 13 and have successfully paired and connected it to my 6 Gen Apple Watch. However, it is not allowing me to unlock my iPhone with a mask on. Under Face ID & Passcode, I wanted to unlock my phone with my Apple Watch if I am wearing my facial mask. This is especially helpful for when I’m at work. But every time, I try to turn this feature on, it says that the Apple Watch is not connected to my iPhone.. but it is? I even tried unpairing my watch and repairing it and it still didn’t work. I also tried resetting the network settings on my iPhone and that still didn’t work. Does anyone know how to fix this?