iOS 15.4 and watchOS 8.5 Allow You to Restore an Apple Watch Using an iPhone
Apple today published a new support document indicating that iOS 15.4 and watchOS 8.5 allow an Apple Watch to be restored with a nearby iPhone.

The support document states that if an Apple Watch running watchOS 8.5 or later displays an animation showing an Apple Watch and iPhone being brought close together, customers can follow the steps below to initiate the restore process:
1. Make sure that an iPhone is nearby. The iPhone needs to have iOS 15.4 or later, it needs to be connected to Wi-Fi with Bluetooth turned on, and it needs to be unlocked.
2. Put your Apple Watch on its charger.
3. Double-click the side button (the button below the circular Digital Crown) on your Apple Watch.
4. Follow the steps that appear on the iPhone.
If the steps fail to work, Apple advises customers to check their Wi-Fi connection. Specifically, Apple says to try using a 2.4GHz network instead of 5GHz, and to avoid 802.1X or captive Wi-Fi networks, such as those in hotel rooms.
In an internal memo to Apple Stores and Apple Authorized Service Providers, obtained by MacRumors, Apple said this feature allows customers and technicians to restore watchOS on some Apple Watch models without the device having to be mailed to an Apple Repair Center. The memo did not specify which Apple Watch models support the feature.
Apple's support document said customers might see a red exclamation point on their Apple Watch instead. If this happens, Apple says to double-press the side button and then follow the steps outlined above. If the Apple Watch continues to display a red exclamation point, customers are advised to contact Apple Support to set up a mail-in repair.
iOS 15.4 and watchOS 8.5 were released today alongside iPadOS 15.4, macOS 12.3, tvOS 15.4, and HomePod software version 15.4.
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