Apple Watch Family Setup - Manage Contacts Pending

I got an Apple Watch SE gen 2 for my daughter. My older son has a series 4 already on the family set up and everything works like it should.

The new SE does not seem to be taking the family setup settings. In the screen time setting under manage contacts, I have the setting toggled to on, and there is a message that it is pending on approval from my daughter in her watch. The watch does not have any message asking for approval. When I was first setting up the watch, I was asked if I wanted to manage contacts, I said yes, I got a message on the phone that approval was waiting on the watch, there was nothing on the watch.

Other settings are available to my daughter that should not be based on what I have set up in screen time. Like access to cellular settings, passcode settings, and more granular settings that could undo the functionality and purpose of why we bought the watch.

I spent a long time on the phone with apple care. We erased the watch and started over three times. We updated my phone to 16.02. We looked for approval messages in my daughter's email. We turned off her contacts in icloud and turned them back on. We reset my phone and it's settings. I turned off the cellular on the watch to rely on the wifi. In the end, Apple care could not come up with a solution other than to return the watch. I don't think returning the watch and trying again will yield a different result.

I'm wondering if anyone else has run into this and found a solution. Any help would be appreciated.