Surprised that the thread for this issue doesn't exist yet.
Somewhere in the communication between watch and phone, the comm can sometimes be broken for an unknown reason and IQMessageStatus FAILURE_DURING_TRANSFER will occur.
From my experience, this only happens when both sides (watch and phone) are sending and receiving, and will always break the communication in one way: from phone to watch.
While phone>watch is receiving FAILURE_DURING_TRANSFER, watch>phone is sending messages happily.
This never happens when the comm is only one-way.
Did anyone encounter this issue? Is there any workaround or pointers?