Yes, this is the new Watch OS10 behavior I guess. It's not too bad with the analog faces since there's a quick animation and looks (almost) intentional. However, quite terrible and jarring on the digital faces, and looks like a bug. Very distracting.
Edit: actually I think it might be a bug after all and NOT intentional. If you use an analog face and set the digital time complication in the center, it also shows 10:09 in the digital complication for a split second after waking from the always on display.