Apple Watch Ultra 4 passcode entry erases previous digits

I have an Apple Watch Ultra 4, watchOS 27.0.1 (24R365), paired with iPhone 18 Pro Max on iOS 27.0.1.

When removing the watch from my wrist and putting it back on, I try to enter my long passcode. As I am entering my passcode, everything after the first digit keeps erasing the previous digit.

For example, let say my passcode is '123456'. When I enter '1' then I try to enter '2', it erases '1'. So therefore I have to start over. Even if I get past the second digit, entering '3' will erase '2'. I find if I enter the passcode very slowly (waiting a couple of seconds between every digit) it seems to work okay.

I have power cycled the watch to no avail. As mentioned above, my watch and iPhone is on the latest public version.

Is anyone else experiencing this? I have submitted feedback to Apple via the feedback app and the web portal feedback.