Always on display

Is it turned on in settings?

Use the Always On feature with your Apple Watch - Apple Support

If it is and it is misbehaving, then there is a progressive hierarchy of  remedies. Hopefully you will not need to go to the end of the list.

First force restart the Watch 

i.e. press and hold both the side button and Digital Crown for at least 10 seconds, then release both buttons when you see the Apple logo. 

 Then, although it may seem irrelevant, while it is restarting Force Restart the paired iphone   Force restart iPhone – Apple Support (UK) 

You may also want to make sure the software on the watch and iphone  are both up to date to the same level. Updates are in pairs. iOS16.3.1 OS9.3.1

Update your iPhone or iPad - Apple Support

Update your Apple Watch - Apple Support 

Test it for a while. If it is still misbehaving... Unpair and set up again

 Unpair and erase your Apple Watch – Apple Support (UK) 

Set up your Apple Watch – Apple Support (UK) 

Make sure you are not using VPN or security apps on the iPhone.

If you've completed that troubleshooting and the issue is still not resolved, Contact Support. 

 Click here > Contact - Official Apple Support

or phone numbers  

Click here > Contact Apple for support and service - Apple Support

and or Genius Bar Reservation and Apple Support Options - Apple

Go through all the processes above in my second pust (restarts, unpair &setup etc) until you get it working, after first making sure that

Watch app, My Watch, Didplay & brightness, Wake on wrist raise is on.

Note that one of the options is set up as new watch, and also use no security apps.

What is not working?

No display? Too dark? Not the expected content?

PS

By "goes dark" I assume you mean blank, black, while on your wrist:

If it just goes darker but readable that is normal

Similarly going black when off your wrist is normal.