Also having this issue on my mate 20 pro (which has previously worked with the watch) Submitted an error report to Samsung through the website as the same issue happens when trying to do so in-app. I'm not factory resetting the watch on the off chance it works after that because it has a shared connection via my carrier and I don't want to risk any billing issues.
I found kinda a fix.
I restored my watch and then chose to login without my phone connected. I logged in through the watch and connected it to my phone afterwards. I still can't login on Samsung account on my phone but I can download apps directly through the app on the watch.