Your Apple Watch showing the wrong hour this morning is a display quirk, not a broken watch, and swapping watch faces fixes it in about five seconds. That was probably a regression test that was missed (because I seem to remember something like this happening years ago).
But this isn’t catastrophic. Remember the Y2K bug where software wasn’t coded properly to change from 1999 to 2000? That was a bit bigger in reach and impact, and we managed to survive it.
I think we have all gotten a bit spoiled by our connected devices automatically setting the time (or even setting it accurately). No more blinking VCR times. I actually enjoy going around the house and finding those older gadgets that need their time set manually. I almost forgot to set my coffee maker. And remember, some of those older cars still need those clocks set.