Now I'm curious where your watch thinks it's at, obviously sunny places (except that somewhere in California they had major weather issues).
I went into the Compass on my watch and then in the upper left corner, I clicked on the 3 horizontal lines.
I took a screenshot of the Latitude and Longitude that was showing. Do you know how to do a screen shot on your watch? It comes in handy for this next trick.
I opened the picture (on my phone) and copied the Latitude and pasted it into the search bar in Apple Maps (on the phone). I went back to the picture and grabbed the longitude, pasted it into maps.
Hit enter. My watch thinks that I'm at home and it's right!

Can you try that? Unless the coordinates come back being in California, you don't need to post a screenshot like this one.
I'm also beginning to think that you should check through these settings:
Phone:
General > Settings > Maps = While Using
General > Settings > Compass > Location = While Using the App and also Precise Location = On
Settings > GPS & Maps = While Using the App
Watch:
Settings > Privacy & Security > Location Services = On
(I can't find another something that I thought I saw before I began typing this reply. Maybe it'll come to me later).
There has GOT to be something somewhere that's causing you this grief. We're going to find it ;-)