I wonder why most of the comments take it very casually and say may be issue with digitizer/ghost touch. Had it been any other OEM, this would have been such a big issue with anecdotes of why people trust apple products.
I don't doubt that this might be nothing, but seeing all these commenters completely dismissing it is rather odd.
Hopefully Apple is less dismissive of this potential security issue.
If this is a software (or somehow even a hardware) issue, than it's still not positive for Apple.
So it's a good idea to apply Occam's razor.
Digitizer/ghost touch is probably the simplest explanation.
The only thing the hacked/pwned idea has going for it is the "We are in control" message, which is still a bit marginal if the watch really was hacked. (None of the other posts mention this and why would a hacker type that message in? Could be because it's a practical joke or maybe part of a phishing attack, but those are tenuous and nothing else mentioned supports those.)
Ghost touches and typing "we are in control" with predictive text, sounds more plausible but still raises an eyebrow.