I only see this on the watch (Vivoactive HR) and never on the simulator. A user has also reported the same.
My device is at SW Version 3.90 (latest update I get from the latest Android Connect IQ app).
I have built a debug version of my app with the latest release SDK 2.3.1 and it still shows this error (there was some indication in another thread that something similar was fixed at this version).
Unfortunately I have no way to capture the web data that is loaded when the error occurs (at least no way I know of), and it happens only every hour or so (which makes for a pretty lousy watch app).
I will send in email the web url needed in the settings for my app currently in the store that will let you see the error, but it is a private web address.
ERROR: System Error
DETAILS: failed inside handle_json_callback
<there is no callstack - that is the extent of the CIQ_LOG.TXT>