Apple has identified an issue where Unlock with Apple Watch may not work with iPhone 13 devices. You might see “Unable to Communicate with Apple Watch” if you try to unlock your iPhone while wearing a face mask, or you might not be able to set up Unlock with Apple Watch.
This issue will be fixed in an upcoming software update. Until the update is available, you can turn off Unlock with Apple Watch and use your passcode to unlock your iPhone 13.
I miss this feature already.