2021 series 3 Apple Watch says storage is full- but no photos, music- just preloaded apps. How to free up storage?

First, try to free up storage on your Apple Watch by removing any music or photos that you've synced to your watch and any apps that you don't need.Then try to install the watchOS update.If that didn't work then;

Unpair your Apple Watch via the Watch app on your iPhone

Then Re-pair your Apple Watch again and setup as new,this usually frees up

enough storage space to update your watch.And without any loss of data.

If the watch updates ok then you can unpair and re-pair it again only this time you can restore from your last backup instead of setting up as new,this restores your watch to how it was but now it's updated as well.