Not referring to watch issues, but iOS issues. For example. I was having battery problems last month with my 6s. It was shutting off at 60% and would stop charging at 80%. They absolutely refused to do anything but run tests until I did a full and completely restore as new. That requires me to lose all my health and activity data. I refused, went home and called AppleCare+. AppleCare sent me a replacement no questions asked because it's not intended behavior to stop charging at 80%. The issue is, as stated above. Apple's first line of defense is to do a restore as new and you will lose you health and activity data.
To sbailey4's point, I can definitely do what was suggested. Restore as new, restore backup then reset all settings. But, Apple's diagnostics will know so it will not satisfy their requirement of a restore as new to see if the issue is resolved.
They need to break apart health and activity from backups and the problem would be solved.