Apple Watch SE (2nd Gen. GPS + Cellular) Stuck in an Update Error Loop During Pairing

I am running into an issue with my Apple Watch SE 2nd Generation (GPS + Cellular) and would appreciate any insight or advice from the community.

The device was originally running watchOS 26.3 when an update to version 26.6 was initiated. The update repeatedly stalled with an "Unable to Install Update" error, leaving the Watch app on my iPhone unresponsive beyond the update prompt. While the watch hardware remained fully functional initially, it has since unpaired from my phone.

Now, the watch is effectively bricked in a setup loop:

• Pairing begins normally, but setup halts at the mandatory update screen.
• Attempting the update to 26.6 consistently triggers the same installation error.
• The only alternative option provided is "Exit Setup and Unpair," which resets the entire flow and sends me back to square one.

The watch is in pristine physical condition and was operating without issue prior to this update cycle. Despite this appearing to be a classic software deadlock, support diagnosed it as a hardware failure after two weeks of troubleshooting.

Has anyone encountered this specific pairing/update loop, or discovered a viable workaround to bypass the update screen or force-flash the firmware?