App list on Apple Watch takes 2 steps to see all the apps now on iOS 27.0.1

See this from the Apple Watch User Guide.

Use apps on Apple Watch - Apple Support

To see more apps, simply turn the Digital Crown (rotate the bottom away from your wrist) while in the view shown on your first photo.

This change was introduced with watchOS 27.

Apple makes its design decisions.

From MacRumors:

”Now, watchOS 27 shows a dynamic grid made up of suggested apps, your most-used apps, and your most recently used ones. The Siri app sits in the middle, but the alphabetical list remains available – simply turn the Digital Crown to navigate through all of your apps.”

Your photo does not show the Siri app, so apparently you have chosen not to activate Apple Intelligence.

How to get Siri AI - Apple Support

UPDATE - Sorry, the iPhone 14 is too old to support Siri AI.

Portreest wrote:

Why are 2 steps necessary? I’ve been wearing an Apple Watch for over 10 years. Dumbest thing I’ve ever seen.

Because that's the way Apple designed it. If you're not happy about it, you can leave Apple feedback at https://apple.com/feedback.

This is a user forum. We can't change it.

Portreest wrote:

Why are 2 steps necessary? I’ve been wearing an Apple Watch for over 10 years. Dumbest thing I’ve ever seen.

This is a personal preference kind of thing, and not all agree with you. For instance, see this thread:

My Apple Watch app menu isn't how I like … - Apple Community

I find that the new 27.0.1 method is way better than the old one. Nine times out of ten (maybe more than nine times) I simply want a recent app or a commonly used app, which appears right there. For the once in a while times I want something else, I'll scroll. I like this approach way more.