I did get a Series 3 pairing and syncing with Apple account on iOS26 ... by accident (or luck).
It seems a reset iPhone on iOS26 will pair and also sync its Apple account with an old Series 3.
See note at end re WiFi.
Recently I was given a Series 3 that hadn't been used since 2022. It charged up OK.
On my iPhone 15, after releasing activation lock (I had user's password) and then erasing and resetting the watch I could pair it ... but it could not log in to my Apple Account.
I updated the watch to the latest available software, which made no difference.
Despite resetting the watch again, I could pair it but still could not log in to my Apple Account to allow Apple Pay with it etc.
Online searches suggested that Apple account syncing was no longer possible with Series 3.
As it happens I bought a new iPhone, and erased my iPhone 15 to give to my wife.
After setting up the phone for her, as an experiment I paired the watch ... and it synced with her Apple account!
It works well, and can be used for Apple Pay etc.
WiFi
The Series 3 watch will only work with single band 2.4GHz WiFi networks. My router allows me to set up additional SSIDs, so I created one that was 2.4 only and with WPA/WAP2 security instead of WAP2/WAP3.
I connected the iPhone to that network, and after a few minutes that had synced with the watch. In the WiFi settings on the watch I selected the new network name, and to my surprise it automatically connected.
Has been working perfectly ever since, even after iPhone was updated to iOS27.