Apple Watch not recording outdoor cycling automatically

Until a few weeks ago my Apple Watch SE automatically detected walking and cycling and recorded the distance in the background. This is a really nice feature because this data also transfers to my health insurance app and I did not need to start a workout for everyday casual bike riding.

A few weeks this stopped working. I checked every setting on my phone and watch related to this and tried resetting the watch and restoring it from backup, resetting and not restoring from backup and deleting the "Fitness Calibration Data".

Sometimes when I go cycling the watch gives me a notification that it detected that I am cycling. When I start a workout from that notification it displays zero distance. Previously it also recorded the distance already travelled when starting a workout this way.

How can I fix this so my watch starts recording cycling distance in the background again?

iPhone SE iOS Version 17.5.1

Apple Watch SE Version 10.5