If every other component works (including display, gps, touchscreen) then mechanical damage during transit looks unlikely, well maybe if antenna fell off, that could happen (didn't see inside of this watch, is there short wire?). Can you try to put it directly next to the phone? Also I'd let the battery fully discharge, that sometimes helps in strange cases. Still, this doesn't look normal at all.
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If every other component works (including display, gps, touchscreen) then mechanical damage during transit looks unlikely, well maybe if antenna fell off, that could happen (didn't see inside of this watch, is there short wire?). Can you try to put it directly next to the phone? Also I'd let the battery fully discharge, that sometimes helps in strange cases. Still, this doesn't look normal at all.