Can not pair and update to 8.5 watch series 3

I own iphone 12 and apple watch series 3. I have recently updated my iphone from 14.7 to 15.4. After that my iphone indicated that update for my watch is required. The update failed, I tried everything including resetting my watch, but now it can not pair with my phone without update. Pairing is half-successful in 1 time out of 50 at least and when it does and I try to update watch there is one of the errors: failed to pair/no internet connection etc.

I tried hard rebooting everything, resetting watch, toggling flight mode - nothing helped. I can not pair and update clean apple watch series 3 with iphone 12 with ios 15.4.

The only thing that worked - is pairing watch with my old phone with ios 14.7. Yet i can not update apple watch from it without updating to 15.4.

Please help.