I don't use a watch. Maybe this bump will get a real expert in here. This may not be possible in GOS but here's my $0.02
techyporcupine A phone call started on the phone in the Google Dialer app cannot be transferred to the watch. The button on the watch
Does your dialer app have an option to send the call to a BT device? To transfer it this way. I realize this isn't a fix but at least it narrows down possibilities.
Bluetooth settings > your watch > Enable phone calls, contacts, other permissions
Download the pixel watch app
Search inside of Gadget bridge or the pixel watch app for settings related to your issues. Give these apps and possibly google play services more permissions like nearby devices, maybe location, call logs, SMS, contacts, microphone, sensors, physical activity, health & fitness.
Set the aforementioned apps to unrestricted battery
Try another dialer app
Settings > apps > special app access > change media output Probably won't help but see if something for your watch is in here to allow.
Don't change developer settings. Turn off developer settings.
Hope it works out for ya