I did all the wipes and reinstall as Garmin Support suggested. Meanwhile also updated to 7.10 - no success at all. Garmin have asked me to send the watch to them, but I hesitate, as I know Poland reality and I anticipate that it will take weeks to get watch back - and I use it daily.
Meanwhile I have found another topic on this forum which is describing EXACTLY same symptoms. So to be specific - my WiFi version says 655.35 - which FF.FF in hex - seems wrong, it should be 2.50. I have tried the method described there -so I have tried to put the GUP2196.GCD file (from latest beta) manually into GARMIN\RemoteSW - but no sucess - after reboot the WiFi version stays 655.35. Also - spotted that once connected to Garmin Express the gup2196.gcd appears in GARMIN\RemoteSW - but does not seems to be installed.
Any ideas how to force watch to update/fix the WiFi driver - which I suspect is the root cause of the problems?
I have decided to attempt force watch to install Wifi driver by installing full beta (7.52). I have performed all the steps described here
and 7.52 was successfully installed. During installation it even listed (in Polish, I'm using Polish language on watch) that it install OS updates, sensor hub update, ANT/BLE, GPS - but nothing on WiFi.
As anticipated - WiFi version remained 655.35 and WiFi connectivity is not working. Any ideas how to force WiFi firmware update?