Whenever I walk away from my phone and return, my phone and watch reconnect via Bluetooth and the little green icon at the bottom appears. When I click on it, it shows that I'm on a call WITH MY OWN PHONE. When this happens, my headphones will be very distorted and muted. That icon is new since the recent update (I believe) so I don't know if this has been the case for a while and I just didn't see the icon.
My phone (note 10) and wife's phones (note 10 and s8 active) do this on both our cars (Infiniti and a GMC) too when connecting to Bluetooth, so I'm not sure if it's a phone or watch issue, or both??