In the recent software update, it seems that with the Wake on Gesture feature, the watch is not obeying the screen time-out rules. I set my screen for 30 seconds, 1 minute, and even 5 minutes. When the watch wakes on gesture, the screen turns off after 5 seconds. But if I wake on screen tap, bezel rotation, or button press, then the time-out rules are followed.
I tested this on the Galaxy Watch original as well and it's the same problem.
This is how it has been working, at least since the launch of GW.
There is a work-around available:
I use a Watchmaker watch face, and a feature in that application is the possibility to (on the watch) switch between the default behaviour and a "geasture time-out" of 15,30,45 or 60 seconds.
A difference to "default" when using the longer times is that an "OFF geasture" is ignored. It always stays awake during the set time after a wake up gesture. The Samsung On-time setting is used when woken by buttons or bezel.