Apple watch keeps on disconnecting - Seems like Bluetooth range (hardware issue) where watch has to be next to the phone

Hi

I have an apple watch series 5 with cellular, and I have noticed that my watch was kept on disconnecting from my iPhone. After many attempts to resolve the issue, which include resetting, factory reset of both phone and watch, and airplane mode, turning off Bluetooth to every solution out there. I finally noticed that issue is with the range, it seems like the Bluetooth hardware range got reduced, and it only works when the phone is next to the watch, then it stays connected. Soon I move it even six inches apart; it gets disconnected. I tried to search online if anyone else has this issue, but I didn't see anyone with a similar issue. So, putting it here to start a thread and see if anyone else is experiencing it and if there is a recall which should take care of this issue.