It may be magnetic interference with the Garmin. It's been a couple of years since I thought about this but if memory serves the Garmin senses the earth's magnetic field and the Wahoo senses gravity.
I have 4 of the Garmin speed sensors. All have worked well until recently. I sold one of my bikes which meant i had a spare sensor now. One day, one of my sensors began doing just as described...erratic readings, it would cause my 520 plus to shut down due to a lack of reading. I updated the 520, changed sensor batteries with no change. So i swapped it for my spare sensor. Never had the issue again until I decided to use the malfunctioning sensor on a trainer. Once again, I'm receiving erratic readings while riding my fluid trainer. My personal thought is that these just wear out. My malfunctioning sensor worked fine for hundreds, if not thousands, of off-road XC mountain biking. Maybe the battery contacts are not quite snug enough? I never tried that, but I might now. However, I would still not be surprised if mine is just worn out.
The newer speed sensors work off of a magnetometer so if they are placed near an electrical field or other magnetized device they will give strange readings.
Same issue here with latest Speed Sensor 2. Had 2 of them. On the front wheel. No magnets near by. Stead speed down a flat road.. Same erratic behavior. Reads correctly then drops to 1/2 or 1/3 correct speed for a few seconds then back again to the right speed. As if it is missing a revolution of the wheel.
Actually have these on all 7 of my bikes and this has always been an issue but I've dealt with it. But recently I was ride leader for a large charity ride where maintaining speed was critical to safety and the sensor went bonkers mid ride. That was the last straw. When and bought a new one and same issue. then another new one and still same issue.
Called CS and they said basically, yea, this happens a lot.... SMH. Really Garmin? 5 years.
This one is going back.