Unlock Mac OS bug

I have an Apple Watch, and Macbook Pro M2 all with the latest software (Sonoma 14.6.1). Most of the time my watch unlocks my macbook without an issue. But occasionally, when my computer is asleep and I click the mouse to unlock it, the watch will not unlock it. I understand this could be because the watch is not unlocked sometimes. But the strange thing is, when I type the password after this happens, it does not unlock the computer. This has happened a few times now so I know it's not me typing the wrong password (no capslock active). I type it carefully and it does not work. As I mentioned this error *only* occurs when the watch has an issue unlocking the computer. If I'm not wearing my watch and I type the password it unlocks without an issue. The only way to unlock the computer is to physically open the macbook (I mostly keep it closed with external monitor). It's not a big deal since I know how to fix it, but I'm quite sure this is a bug. Anyone else have this issue?