I don't know if this is related, but on the iPhones when updating to iOS 16 it would cause aftermarket soft OLED screens to have touch issues on the iPhone 11 Pro Max. and aftermarket hard OLED screens to have no image on the iPhone 12 Pro Max. This was apparently caused by a new boot process introduced on iOS 16. There may be a similar issue with watchOS 9. I wouldn't be surprised since this is definitely something Apple would do.
The only option for the iPhones with problems was to downgrade OS or change the screen with a different quality. This could be the case with the watch, although I do not know how to downgrade with an Apple Watch.
Of course you may just need to try different digitizers in case you happened to just have two go bad on you.