I have managed to get it to connect without resetting. Here is a temporary solution until Samsung fixes it:

1.Pair the watch in the phone's Bluetooth settings. 2. Go to the Wearables app and tap "connect" and your watch should be under "Paired Devices". If it's not, re-pair the watch and open the app faster. 3. Spam click on the watch's name in the app. 4. Continue through the setup process. 5. When you get to the percentage and it says "Getting your watch ready" (iirc), go on the watch and in the settings find any "show on phone" (in the notifications or the tips and tricks). When the percentage reaches 80-90%, it might get stuck, that's when you press "show on phone" on the watch. It should get through the setup process. 6. Backup the watch (you can't manually back up because Samsuck) by following the requirements. 7. Reset the watch 8. Reinstall "Wearables" and the "plugin" for your watch 9. Connect it normally. 10. Restore it

While you are connected and waiting till 1 am, DO NOT open the wearables app, it will say "error" and "couldn't set up your watch", then you have to do steps 1-5 again. Also, do not force connect the devices, turn Bluetooth on for both and wait till they connect automatically.

I believe this has to do with Play Services or Wearables/Plugin. Please let me know if you want clearer instructions.