I did some exploratory testing today, and I found that I have to have the Tempe fairly close to the 920 (within a couple of inches) for it to find the Tempe quickly, but then I can move it further away (maybe 3-4 feet), and it is able to maintain a connection. I wasn't able to get it to connect with it staring at the farther distance, though.
I don't believe that this is expected behavior. ANT+ should be able to work within ~10m range, so I would expect it to perform better than this. I will continue to make inquiries and see if I can get to the root of this issue. If you have any other information you can provide, or notice anything else you believe is relevant, please let me know.
I was only able to get the tempe app displaying data once. Every other time it simply says searching. It did not matter if it was sitting next to the watch or further away. I notice the app has been pulled so I assume it is fundamentally broken? Works fine with my Fenix so I know this is a problem with the 920XT/app. I disabled from the Fenix when testing in case this made a difference (which I would not think it would since I think the temp just broadcasts).
I removed the app since it did not appear to be working correctly, and we identified a bug in the app that can cause a device to crash. It will be made available once those are fixed.
I'll continue to evaluate the app and see if I can narrow down the potential cause. I haven't been able to replicate this quite like you're describing, since it always connects for me, but maybe with some more testing I can figure out what's happening.
I'm happy to help with troubleshooting if you like. I work in support so am technical although have not looked at ConnectIQ, but would be familiar with things such as logging, tracing etc if this would help you. I only ever saw my tempe connect once and it must have taken over 10 minutes. I left it longer than this other times and it sat searching forever (it has sat there next to my watch for 3 minutes while typing this).
[Edit: I gave up after it was searching for about 20 minutes without connecting]