What is the expected/acceptable accuracy level of Apple Watch distance measurement? We have two series 4 watch - one mine and one that my wife wears. When we go on hike together and start "outdoor walk" exercise on both of our watches we're getting ~5% discrepancy for distance tracked. Is that expected?
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I think this is totally expected it can happen, but not be the usual experience.
Apple has an article explaining how to start over in the calibration. If the measurements start off wrong - they won't get back to accurate in my experience and one watch I had didn't have my phone nearby when I set it up, and ended up with my step length 10% off.
I'd run through all the items from the top and see if you can get the step length accurate for the terrain you're most likely to want the numbers to be accurate. I've set up about a watch about a dozen times, and I only had one time it was off enough to need a recalibration, so it's hard to guess how common this is from anecdotal reports like yours and mine.