The Apple Watch has some forward looking tech built into it. For instance, it has some hardware that is not currently being used. That indicates that the refresh cycle may be longer than we have seen with iPhone or iPad - update by software only.
My guess is most of it is just waiting for FDA approval. There’s a chicken-and-egg problem of getting enough models available for comprehensive testing, vs the LONG evaluation & approval times plus having too many people using the new product (very Apple behavior: it doesn’t exist until it’s available, or pre-announced as short before then as possible). By getting the Watch out there now, they can more easily engage in FDA product testing - quite possibly via fine print in the EULA (no reason, say, the pulse oxometer can’t record the data & send it back to Apple (with user’s permission of course, as always included in EULA) which then uses it anonymized for testing data). No reason to hold off selling the product with those sensors disabled by software until the FDA, after months or years, finally approves it; considering Apple has easily sold 5M Watches already (10M possibly), that’s no less than $2B revenue in just a few weeks - no point in holding it back for a small matter of delayed paperwork and software updates.