SE Watch on 9.6.3 not getting notifications since 17.4.1 update

Since my 13 phone updated to 17.4.1 my SE watch on 9.6.3 is no longer receiving notifications from the phone.

So no message alerts, no email, or new calendar entries (I've tried creating new entries on both the watch and the phone - neither sync to the other). Remote camera doesn't work.

However, health data is being sent from the watch to the phone.

I can also ping my watch from 'Find my', which I assume is being done via the watch's connection to the phone as my watch doesn't have wifi turned on, or any mobile comms.

Watch says it is connected to phone, and phone says it is connected to watch. I've tried a hard reset of the watch.

If I go into the Watch app on the phone, it tells me to update, and it won't allow me to change any settings until I do.

Does that mean I now have to update to 10.4, or are there any other settings or tricks I can do to restore the notifications?