'If I orient the watch so that is displays'
'I made a short video to demonstrate this'
Unless the video was shot through a fish eye lens, it appears the base plane is offset 60 degrees to the ground. Not very parallel.
See #3 post:
"The compass app also expects to work like a 'real' compass - so with the watch face parallel to the ground rather than perpendicular."
Maybe the face needs color hinting feedback when not parallel?
The compass seems veeeery sensitive to really being parallel to the ground.
If I orient the watch so that is displays around 355-005 and tilt the watch a bit to the right or left, it will go to around 40 or 320. I made a short video to demonstrate this.