Apple has added an extra year of coverage to the warranty for some first-generation Apple Watch units. The extension was revealed in a note to authorized service providers. With the extension, the warranty is lasting for three years after the purchase date.
This warranty is meant to cover units affected by an expanded/swollen battery issue.
Apple has extended Service coverage to eligible Apple Watch (1st gen) models with an expanded/swollen battery to three years after the original date of purchase. Eligible devices will be covered for two years beyond the original 1-year Limited Warranty. – Apple
The expanded battery issue has been reported since 2016. In some cases it’s led to the device’s display becoming displaced. It’s not a very widespread problem, however.