Hello,
I tried this solution and it worked,
- Before starting Watch Face Studio, ensure all ADB processes are NOT running in task manager > details.
- Connect watch and laptop on the same Wi-Fi network.
- Turned on the development mode in the watch.
- ADB debugging turned on for the watch(Settings->Developer options->ADB debugging).
- Click the run on device button in Watch face studio.
- Put the IP address (watch IP address) in the connection box.
- Accept debugging prompt if you have not set it to always allow on watch.
- Watch will show up for selection.
You can see this thread for more details Galaxy Watch 4 Not Showing Connected Devices - #10 by evbashkina