I have no issue at all. I unlocked once when the watch is on my wrist, and I can make GPay or SPay without having to input pin. The old watch I have to use the pin every times when making payment. Now I preferred unlocking only one time. It would be nice if there is a option unlocking the app before using and unlocking the watch once and ready to go.
I was having a similar issue. I tried to set up Samsung Pay 4/5 times before I tried one thing that was suggested and that was to be wearing the watch, which I wasn't and that it had a snug fit. Once I did that and went through the setup again it worked.