Nonstop bluetooth disconnects and incorrect PIN pairings

Since yesterday, my watch (LG Watch Sport) will disconnect from my phone (Pixel XL) every few minutes. If I dont click the prompt on both devices, I keep getting an incorrect PIN failed pairing error. It was working fine up until now.

I have reset the watch, cleared bluetooth app cache, reset network settings on phone, reinstalled Android wear app, reflashed system partition, booted into safe mode. Only thing left to do for me is to factory reset my phone and spend hours setting it back up.

My watch came with 2.0, so I didn't update it like it seems others did. I don't know why it broke.

Only thing giving me hope is a one review of the Android Wear app on the play store: "Completely ruined a working stable Bluetooth connection between watch and phone. Since the last update pairing required after a few minutes or few hours now. Continually dropping out."

TLDR; Every few minutes I get the re-pairing request, and if I don't acknowledge it, it says incorrect pin.