I guess you could put the phone app into a blocked notification. Are you just trying to turn off phone calls? If everything you can just turn on theatre mode.
Using the Asus ZenWatch again, theater mode works exactly the same as it does on the Moto 360... Another reason why I think this is the new intended operation.
I think you're right. I was actually using theater mode in a darken theater last weekend and the screen kept popping on. I can't say for sure what type if interaction I accidentally had with the watch, but my attention was definitely diverted from the movie to my new Android Wear obsession!