Cannot enable mic on Apple Watch 9

Recently, my Apple Watch 9 has the red dot indicator on all the time, and the mic is disabled as a result. I updated the watch to watchOS 26.1 and my iPhone 16 to iOS 26.1. Still did not fix the problem. I reset the control panel and turned the Silent Mode (Bell icon) on and off again. I check the sound and haptics on both phone and watch - all appear to be correctly set up. I rebooted both the watch and the phone. Still no luck. I can’t use Siri or talk-to-text on my watch, or anything using the mic. Any help is appreciated.