After receiving javaliga‘s reply I observed my handrail grip, the time/distance readings on my iWatch and treadmill more closely. I have more information to add and maybe a suggestion if Apple ever updates is feature.
First of all I, as well as others I know, like the exercise data to be perfectly accurate. Especially if it jipe you out of some of your effort. It defeats the purpose if your progress data is inaccurate
I found that the error is fairly consistent every time. Apple puts the user through a lot of trouble to calibrate the GPS, I think it would be reasonably easy for the software to correct the poor man’s treadmill data versus Watch data by applying a user enter correction factor. In other words, at the end of the walk or run, just enter the distance you see on the treadmill screen which is accurate because the distance is mechanically connected to the display.
Of course the time always matches perfectly so only the distance would have to be entered. A simple prompt after they activity is all that is necessary for the software to get a correction factor. It would be linear and not follow variations for changes in running speed but a lot better than nothing.
With a little more sophisticated software they could voice prompt you to shout out the distance you say every 10 or 15 minutes, depending on the granularity you are looking for, and come up with a nonlinear correction factor that agrees with yours speed.
Just a thought that would make using my watch a little more enjoyable.