I don't doubt that this might be nothing, but seeing all these commenters completely dismissing it is rather odd.
Hopefully Apple is less dismissive of this potential security issue.
Even if this is not a "hack" it's still something apple should be taking seriously since it's something its users can clearly panic about.
It might be a hardware fault, though getting apple to admit that is like finding an upvoted post on HN critical of apple.
If this is a software (or somehow even a hardware) issue, than it's still not positive for Apple.
So it's a good idea to apply Occam's razor.
Digitizer/ghost touch is probably the simplest explanation.
The only thing the hacked/pwned idea has going for it is the "We are in control" message, which is still a bit marginal if the watch really was hacked. (None of the other posts mention this and why would a hacker type that message in? Could be because it's a practical joke or maybe part of a phishing attack, but those are tenuous and nothing else mentioned supports those.)
Ghost touches and typing "we are in control" with predictive text, sounds more plausible but still raises an eyebrow.