how are people managing to factory reset apple watch?

forgot the passcode? that one has its own route. put it on the charger, hold the side button until the power off slider shows, then press and hold the digital crown until the erase option comes up. activation lock still applies after, so you'll need the apple id that was on it.

Don't erase it from the watch itself while it's still paired - unpair from the Watch app on the iPhone instead. That takes a backup and clears the activation lock properly. Erase from the watch alone and it comes back asking for the old Apple ID on setup, and then you really are stuck. If the phone's gone and you can't unpair, it's Settings, General, Reset, Erase All Content and Settings on the watch, left on the charger, and it takes a while.