This post is from the WWDC26 Apple Pay Q&A.
We are having hit or miss for getting the pass ready to be installed on Apple Watch even if remotePassEntriesAvailable is set to true, and our QA team is reporting this as a bug. Is this a known bug? This from the wallet extension.
This wouldn't be expected. The best thing to do is to file a feedback report from the iPhone you're seeing the issue on. You can find details on how to report issues with Feedback Assistant here.