I Have the same problem. Although it is not "a real fix" and will cause battery life to suffer, there is a setting that will make it less annoying. you can change the "wake" setting from 15 secs to 70 secs, which will allow you to dictate for 70 instead of 15 secs.
1. Open the watch app on your phone
3. Go to General
4. Go to Wake Settings
5. make sure "Wake for 70 seconds" is checked
This will keep the watch face powered for 70 seconds when you raise your wrist or tap on your watch. Since the watch face will be on longer every time you use your watch or raise your wrist, it will eat up battery power faster. since most dictation are less than 70 seconds, it should help alleviate the annoyance. In the end, Apple needs to fix this problem. Not sure if it is a software or hardware glitch. Updating OS on both had not worked for me.
Cheers,
FIshermanjuice