Sorry to "reopen" this thread, but this has been bugging me for a while. I have the same issue as the OP and 9635560, where my GIFs won't work on the cover image. I was reading what jim_m_58 said and it totally makes sense, but either there is a loophole or something needs to be better explained by Garmin (if it is allowed or not, and if yes how to do it).
If you go to the style and substance category, there are several watch faces posted for the first time as soon as Dec/2020 (less than 5 months ago) with the GIFs. So what's the trick here?
I have found a solution:
forums.garmin.com/.../animated-cover-image-in-app-store