Unable to pair Apple Watch version 3 to iPhone 12
Unable to pair Apple Watch into iPhone 12
Apple Watch Series 3, watchOS 7
FWIW a lot of people have had trouble pairing or updating a series 3 watch. With the limited memory in a series 3 watch, your best option may be to make an appointment at the Genius Bar in an Apple Store near you and let them look at it:
Genius Bar Reservation and Apple Support Options - Apple
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Series 3 Apple Watch Setup Fails At Updat… - Apple Community
Apple Watch 3 is stuck on preparing updat… - Apple Community