I am wondering whether Charge Limit is not working because watchOS 10 has been so bad at battery usage that 80% won’t be enough to get us through a day of normal use.
this is definitely a possibility. yes !
the algorithm the watch uses looks at how much of the battery is being used on a typical day for you.
and, if it finds that, in general, you are using more the 80% limit that it would like to set, then it will continually charge to the maximum it can, ignoring any Charge Limit.
my watch understands that in my typical day to day usage i get out of bed before 5am and that i use it while i sleep to track my sleeping. it knows that the time i charge it is just before bed, and i only have that 1 hour or so to finish charging it, and it knows that on a typical day i need all the battery it can give.
in my case, i never encounter the Charge Limit at all, except during the first week i owned the watch.
in your case you attribute the Charge Limit never kicking in to problems with the Watch 10 OS.
in my case i attribute it to just heavy usage by me.
in either of these two events, the watch's Charge Limit function is not at fault.