This is a confirmed Apple Watch software issue related to the daylight saving time change, rather than a problem with your Apple Watch Ultra 3.
Apple has published a support article describing exactly this behaviour:
- Always On display shows the old time (one hour ahead).
- Raising your wrist or tapping the display shows the correct time.
- Alarms are not affected.
Apple recommends two fixes:
- Switch watch faces: Touch and hold your current watch face, swipe to another face and select it. Then switch back to your preferred face.
- Restart your watch: Turn it off, wait a few seconds, then turn it back on.
If you leave it alone, Apple says the display should correct itself at midnight following the time change.
More info: If your Apple Watch shows the wrong time after daylight saving time changes.