I understand that you're unable to use Dictation on your Apple Watch, and I'm happy to provide some help for this issue.
First, make sure that Dictation is enabled on your Apple Watch:
Turn Dictation on or off
On your iPhone, go to Settings > General > Keyboard. Then turn Enable Dictation on or off.
Use Dictation on your Apple Watch - Apple Support
If it's already enabled, make sure that when you start Dictation, you're only tapping on the microphone button and not holding it while trying to speak:
Reply to a message
- Open a message, scroll to the bottom, and tap .
- Say your message. You can also say punctuation. For example, say “Do you have any ideas question mark.”
- Tap Send.
If you want to send the message as text instead of audio, change the setting on your iPhone: Open the Apple Watch app, tap the My Watch Tab, then tap Messages > Dictated Messages.
Thanks for using the Apple Support Communities. Cheers!