The watch doesn’t have an option in the settings to enable the Bluetooth hotspot.
I found a solution for this problem, the app “Bluetooth Tethering On Off” does the job just fine.
The speed is somewhat disappointing, around 1mbps down and 1mbps up (speeds seen on the tethering client. I tried with an iPhone SE and a Zenfone 2)
My use case for this would be to share internet to my android car radio as efficiently as possible. However, due to the limited speed I will probably use the more power hungry wifi hotspot instead.