I have spent the last 2 hours trying to apply the latest update. After over upwards of 20 attempts, it finally did it!
Here's what I had to do, to get this update to apply:
1. Make sure your watch is fully charged.
2. Ensure WiFi is connected.
3. Disable Bluetooth on the watch.
Having "Bluetooth on" will keep "disconnecting the WiFi" when the phone is in range.
4. Go to Settings > System > About > System Updates
5. If you see the System is up to date "green check", keep "clicking it" (rapid pace touches) until you see the screen change and detect the update.
Again, for this to work, you must be connected to WiFi and with Bluetooth off.
6. Monitor the download progress.
I had to keep touching the screen (with up and down constant movements) to ensure the progress bar wouldn't disappear.
7. When the download is fully verified hit the option to apply, then swipe to dismiss and go back to the Main dial.
In my case, if I didn't dismiss the dialog, the countdown would never fully complete and the "System up to date (green check)" would suddenly reappear causing the whole update to be lost! Restarting the watch manually would not apply the update. I had to repeat the entire download procedure several times until I found the workaround.
8. Finally wait for a few seconds, in my case the System update notification appeared. Going through this notification should complete and apply the update.
Let me know if you see a different behavior.
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