Hello Chel_86,
Please ensure the contact is blocked correctly on the iPhone that is paired to your Apple Watch, so we can make sure there's no issue there. This link will guide you through how to review blocks: Block phone numbers, contacts, and emails on your iPhone or iPad
Manage your blocked phone numbers, contacts, and emails
To see the phone numbers, contacts, and email addresses that you've blocked from Phone, FaceTime, Messages, or Mail:
Phone
Go to Settings > Phone and tap Blocked Contacts to see the list.
FaceTime
Go to Settings > FaceTime. Under Calls, tap Blocked Contacts.
Messages
Go to Settings > Messages. Under SMS/MMS, tap Blocked Contacts.
Mail
Go to Settings > Mail. Under Threading, tap Blocked.
Please also check out this link, which explains how to manage messages and conversations on Apple Watch, and may be helpful: Read messages on Apple Watch
If you need additional assistance, please contact Apple Support for help. You might be able to reach them here: Contact Apple Support
Thanks!