I have seen one first hand at a party. The watch started making noises and smoke. Thankfully it was a silicone strap cuz the guy just ripped it off.
I had similar case, during the night I woke up because felt my Watch 6 started to burn my hand. As I understand it was because my smartphone was in a different room and the signal between them was week or no at all, so watch started to boost signal or connect over WiFi/LTE and that resulted in a higher heat been produced. Also watch was under the blanket as well. I now always leave smartphone in the same room and this issue never happened again.