It is very inconvenient to have to find my phone to silence an incoming phone call, after I have already silenced it on my watch. That's a big part of the point of the watch is to not have to always have your phone with you. That means my phone is annoying everyone at my desk or the locker room or even other members of my house...so I have to go running just to silence my phone. I thought it was a setting, but I have tried all the settings that have been recommended and it still rings. As a different but similar item, my alarms have the same problem. If I'm not near my phone when my alarm goes off...I have to go running, because my phone gets insanely loud and I cannot dismiss it from my watch.
The phone will keep ringing until you answer or dismiss it on either your watch or the phone. The phone does not know on which device you are going to take the call, so the phone will ring, and the watch will vibrate (if you silenced it) until the call is answered or dismissed. If you answer or dismiss the call from your watch, the phone will stop ringing. If you answer or dismiss from the phone, the watch will stop vibrating. You can put your phone ringer on silent or vibrate and then you won't have to hear it from either device. You can also lower the ringer volume on the phone.
