Apple Watch unpairs after pairing during setup (context given)

The display of my Apple Watch Series 3 separated itself after being dropped several times. I easily reconnected the display and applied some tape to keep it together. But now it's no longer reconnecting with my iPhone 8 Plus, Auto-Brightness and attempting to adjust the brightness in the settings is also not working. I tried resetting the Apple Watch from the settings, but with no luck. After Googling, I've found a way to forcefully reset the Apple Watch (plugging in the Apple Watch and holding the Digital Crown in the power menu). After it successfully resetted, I tried repairing it with my iPhone. When pairing, it shows the message: "Connecting the Apple Watch... Please Wait." or something along those lines (perfectly normal), but then it stops and a new pop up comes up on my iPhone: "Unpairing Apple Watch... Please Wait". This is not normal.

I've tried everything: re-resetting the Apple Watch (digital crown then tapping reset), force reboot (holding digital crown and side button), removing the apple watch from my Apple ID, attempt to pair it with other iPhones, let it charge overnight, manually tapping on the i icon on the Apple Watch and set it up like that. Nothing worked.

Software versions:

• iPhone 8 Plus: iOS 16.5 (also didn't work with 16.4.1 and 16.4)
• Apple Watch Series 3: watchOS 8.7.1 (latest available for this watch)
• Other iPhones I've tried: iPhone X (iOS 15.4), iPhone 12 Pro Max (iOS 16.3)