Unable to snooze alarm on Apple Watch Ultra 2 with strange bar showing at the bottom

When you have your wrist down, and you get an alarm and snooze it, it opens the Smart Stack. However, if you get an alarm while you are using your watch, and snooze it, a mysterious Dynamic Island-ish bar shows up at the bottom, with a swipe line. When you swipe it up, it shows the alarm Live Activity card, and you can cancel it and click it to go to Alarm app like normal. Is this a bug? It seems strange.

[Edited by Moderator]

Original Title: Alarm snooze while using watch