Jon Ive bent over backwards in his Watch promotion videos talking about how he studied traditional watches etc. And we know from photos that he preferred round traditional watches.
Moreover, Apple emphasized that their Watch was about fashion, yet real round watches outsell square almost 9 to one.
It seems pretty clear that Apple just wasn't prepared to make the extra effort. Or be that courageous. Rectangular was them taking the easy way out, IMO.
Put it this way: I betcha that if Apple ever did offer a round version, it would outsell the rectangular by a long shot, just as regular watches do.
Square works better for information on a smaller screen.