Apple Watch SE Gen 2 GPS + Cellular Family Sharing error

I purchased an Apple Watch SE (2nd gen) for my 9 year old son. He does not have an Iphone of his own, so i am trying to set the watch up on family sharing. When following the steps, I keep getting an error message when I try to log on with his user name and password. The error I keep getting is "Could Not Sign In" The operation couldnt be completed. (CDPStateError error -2).

I have tried troubleshooted the issue by downloading the latest software update to the Watch. I have tried turning location services off on Watch and turning Wifi off on my phone during the set up process. These are remedies that others mentioned had helped them but nothing is working for me.

It appears this has been an issue with the Watch for a few months for Apple watch purchasers wanting to do the family set up.

Apple support team tried for about 4 hours troubleshooting this issue but no use. Today I went to Apple store, they tried restore the watch to factory reset but they couldn't do it. So they sent it to offsite for inspection. Even Apple store technician said they haven't seen this type of issue.

Has Apple or anyone found any real solutions?

Thank you