Q: Does exercise only register when walking on hard surfaces?

Hi

It is possible that your walking pace in the woods fell below the watch's assessment of a brisk walk, whereas your walk on a paved trail did not.

Every full minute of movement that is at least equivalent to a brisk walk counts toward your Exercise and Move goals. Any activity below that intensity will count only toward your daily Move goal.

The Activity app relies on your arm motion and the watch's built-in accelerometer to track movement, whereas the Workout app can also use the built-in heart rate sensor and GPS on your iPhone (if you are carrying your iPhone with you and have Location Services enabled). If you are not using the Workout app, you should therefore allow the arm on which you are wearing your watch to swing naturally whilst walking at the required pace in order to help you earn Exercise credit.

If you are unable to swing your arm, you can still earn Exercise credit by using the Workout app, selecting Outdoor Walk as your activity and bringing your iPhone with you (subject to GPS coverage).

To help your watch to deliver more accurate Activity and Workout-related estimations when your iPhone is not available, you can calibrate your watch.

More information:

Use the Activity app on your Apple Watch - Apple Support

Calibrating your Apple Watch for improved Workout and Activity accuracy - Apple Support

I think the explanation provided by Jonathon UK is on target. My  Watch will record very short walk time when walking slowly, especially when on trails. But if I push it hard and elevate my heart rate and hiking speed the time measurement is closer to the amount of time I spent on the trail. When I use the Workout app the hike is accurately measured.