Whether you use a physical SIM or an eSIM provided by your cellular service provider, your Apple Watch Ultra 2 uses an eSIM for its cellular connection.
The physical SIM in your iPhone is not physically transferred or inserted into the Apple Watch. When you set up Cellular on the Apple Watch, your carrier provisions a separate eSIM profile on the watch when you pair your watch with the iPhone, usually under the same cellular plan or phone number as your iPhone.
Hold your iPhone near your Apple Watch, wait for the Apple Watch pairing screen to appear on your iPhone, then tap Continue. You can also go to the Apple Watch ...
Set up and pair your Apple Watch with iPhone