Apple Watch Series 3 pairs, shows it needs an update, and then immediately disconnects.

Hi all, I was recently gifted an Apple Watch Series 3 from a co-worker that was wiped and iCloud unlocked. Today I tried to pair it to my iPhone 13 Pro and all went well until it told me to update the watch. I go ahead and update it, only to get stuck on the connecting to apple watch screen. Shortly after, the apple watch does the animation that shows its paired, but then the iPhone shows Unpairing Apple Watch for a few seconds before showing the main screen again. I have already tried factory resetting the apple watch, but that did not help. Any help would be greatly appreciated. Thanks.