Apple Watch SE just a battery issue?

I have an Apple Watch SE purchased new in late Feb 2021. Over the last couple of months I’ve had issues where the watch keeps asking for the passcode, like it isn’t recognising that it is being worn. This is coupled with workouts being paused seconds after starting, again like it isn’t recognising that the watch is in my wrist. The battery is also running down really quickly too, more than 10% per hour when worn. Battery health is 86% so I wouldn’t expect it to run down so quickly. I’ve unpaired and restored and all software is up to date on the watch and my iPhone 13. The strap is tight so keeping the watch close to my wrist. I’ve turned off the passcode so at least I can wear it but the battery life makes it unreliable.

My question is does anyone know what the issue is and whether anything can be done to sort this out? I don’t want to pay for a battery replacement if it doesn’t resolve the other issues and I’m not likely to buy another watch if I only get 2 yrs of average use (I wear ‘normal’ watches as well).

Any ideas welcomed.