After recent update of watchOS 10.1 the auto unlock feature stopped working
Seems like after the WatchOS 10 update the auto unlock feature stopped working. Restarting the watch sorted it out for me. .
Apple Watch Series 4, watchOS 9
I have noticed a few anomalies in "unlock xxxx with Apple Watch" and "unlock Apple Watch with iPhone" but they seem to be random, not reproducible as I would expect for a software bug. I'm not even convinced it is not my fat fingers doing something silly to generate Operator Error.