The WiFi thing is made more complicated by how the Apple Watch works. It uses an adhoc WiFi connection to your iPhone, so you don’t want the toggle to disable that. And it would be confusing to have different behavior depending on whether or not your watch is nearby.
Apple Watch uses Bluetooth to communicate with your phone, not WiFi (unless it’s out of Bluetooth range, in which case it will connect to a known network if possible, then LTE if you own a cellular model).
Unfortunately true even in the case of Watch updates. That’s why the trick to make it faster is to kill Bluetooth via Settings.app after it starts downloading an update. Easily half the time spent waiting!
