I believe I experienced a similar problem to what others report here. I bought my Note5 from T-Mobile back in October. Never really used Bluetooth much, and when I did I had no problems. A few weeks ago I got a Gear S2, and for a few days the range seemed fine. Then after about a week (and possibly right after a software update), the range went to hell. I could not get even a few feet out of Bluetooth. Strangely, human bodies proved to be the Bluetooth antenna's kryptonite. I tried many experiments: for example putting my watch on my left hand and my phone in my right back pocket caused Bluetooth to disconnect from my watch within seconds. If I held my phone in one hand and my watch in another, and separated them by 3/4 the length of my outstretched arms, I could establish a Bluetooth connection. But if I moved them down to my waist (same separation length) so as to block the signal with my body, I lost the connection. Of course I also tried connecting my phone to other devices and got similar results. Finally I tried putting an iPhone equidistant from my Note5 and a Note4, and used the 'Bluetooth Finder' app to measure the signal strength. At 3 feet I could get -60 dB with the Note4, but -90 dB with the Note5 (so 1000 times less signal strength). I say all this to demonstrate that the problem seems to be weak reception in the Note5.
I called T-Mobile and they handled a warranty replacement from Samsung. My new Note5 works great. Right now I've got my phone with me, and my watch in another room, yet they are connected via Bluetooth! I'm not sure if this is just a case of a bad device whose antenna wore out after significant usage, or if the software update had anything to do with it. For what it's worth, I updated everything on my Note5 right away, and still have no problems. Perhaps the order in which the Android and Gear app updates are performed matters? I know that's mostly baseless speculation, but other than simple malfunctioning hardware I can't really come up with another explanation.