After disconnecting the phone, watch, rebooting, nothing worked.
Ultimately, it appears that this is a bug appears to be caused by a failed installation of the WatchKit debugging package.
Steps install the package manually:
Disconnect iPhone from Mac
Launch Xcode
from the terminal
cd /Applications/Xcode.app/Contents/MacOS/
./Xcode -DVTDownloadableLogLevel 3
Press CMD+F
and search for the output "Starting a download for Watch"
Quit Xcode
Open Xcode
with flag to keep the downloaded files
./Xcode -DVTDownloadableLeaveTemporaryFiles 1
Quit Xcode
Mount the Disk Image
then open the Package in Pacifist
(https://www.charlessoft.com)
Open the following location
~/Library/Developer/Xcode/watchOS DeviceSupport/
Drag the System
and usr
folders from Pacifist into the folder
Reopen Xcode
Reconnect the iPhone to the Mac, and note that Apple Watch is connected successfully.
Adapted From Guide: http://indiestack.com/2016/12/installing-symbols-for-watchos/