Yes - the problem is that the device doesn’t advertise when it has an active connection. This is fairly common with small peripherals, and is just part of how they are designed (the idea is that they will only have one connection at a time, so there’s no point advertising for another if it has one already).
For my watch (a Pinetime), I simply don’t have my phone connected to it. Obviously this means I lose some functionality, but the trade-off is OK for me. On Android you can simply tell it to not automatically connect, I am not sure if iOS always gives the user that choice. And if you use the watch to get notifications etc, it might be more useful to you that way than as a beacon :-/