watchOS 4 no longer lets you browse iPhone music library on your Apple Watch
In a major change to how the Apple Watch operates, users can no longer browse their iPhone's music library after updating to watchOS 4, and instead can only view songs stored on the watch itself.

Previously, users could use Force Touch or scroll up in the Music app's main menu to choose a source. There, watchOS 3 and prior presented the option to view tracks stored on or streamed from a connected iPhone, as well as those stored on the watch itself.
But with Tuesday's release of watchOS 4, there is no way to view the music library from a connected phone. Launching the new Music app in watchOS 4 presents users only with songs that have been synced directly to the watch.
Of course, this is less of a concern for users buying the new Apple Watch Series 3 with cellular on Friday, as it will have the ability to stream music directly without a connected iPhone. However, support for streaming from Apple Music and iTunes Match isn't arriving until October at the earliest, and that feature does not apply to watchOS 4 users without a Series 3 with cellular model.
Other changes to the Music app in watchOS 4 include the ability to automatically add songs that are in a listener's "heavy rotation." Users can also manually select multiple playlists to sync to the watch, though it is limited to 2 gigabytes of storage.
While watchOS 4 will no longer allow a user to browse their iPhone's music library, they can still use the Apple Watch to control it. In fact, it's now easier than ever: A "Now Playing" screen shows up by default when the user is playing music from their iPhone, giving quick access to pause, skip a track, or adjust the volume with the Digital Crown.
However, in order to take advantage of this, users must start the playback of music on their iPhone, then continue controlling it via the Apple Watch.

Previously, users could use Force Touch or scroll up in the Music app's main menu to choose a source. There, watchOS 3 and prior presented the option to view tracks stored on or streamed from a connected iPhone, as well as those stored on the watch itself.
But with Tuesday's release of watchOS 4, there is no way to view the music library from a connected phone. Launching the new Music app in watchOS 4 presents users only with songs that have been synced directly to the watch.
Of course, this is less of a concern for users buying the new Apple Watch Series 3 with cellular on Friday, as it will have the ability to stream music directly without a connected iPhone. However, support for streaming from Apple Music and iTunes Match isn't arriving until October at the earliest, and that feature does not apply to watchOS 4 users without a Series 3 with cellular model.
Other changes to the Music app in watchOS 4 include the ability to automatically add songs that are in a listener's "heavy rotation." Users can also manually select multiple playlists to sync to the watch, though it is limited to 2 gigabytes of storage.
While watchOS 4 will no longer allow a user to browse their iPhone's music library, they can still use the Apple Watch to control it. In fact, it's now easier than ever: A "Now Playing" screen shows up by default when the user is playing music from their iPhone, giving quick access to pause, skip a track, or adjust the volume with the Digital Crown.
However, in order to take advantage of this, users must start the playback of music on their iPhone, then continue controlling it via the Apple Watch.

Comments
This still doesn't resolve the issue of playing music from your phone while at the gym, but not getting any workout-related audible alerts from your watch, because your Bluetooth headphones are paired with your phone.
It would seem to me that the best solution to this would be to intelligently route audio alerts from the watch *through the phone* when working out and streaming music from the phone. Otherwise, the alternative would be to force streaming/audio on the watch, draining the battery life of the smaller and less capable device of the two. However, this is just me spitballing and might actually be a major technical hurdle for Apple. It's clearly a problem, though.
Please leave apple feedback and let them know we want this feature back (maybe they can add it back when they update the watch music app for apple music)
https://www.apple.com/feedback/watch.html
Also, I can browse my entire photos library through my Apple TV so don’t know WTF you’re talking about. More FUD, obviously.
At some point over the last year, I actually had a problem where watch alerts would hijack my W1 headphones (auto-switch inputs) and pause music on the phone, without switching back to the phone or restarting the music. Subsequent updates have made it so you manually select the headphones when you start playing music, which sort of kills some of the functionality but avoids that weird issue.
It seems to me that Bluetooth technology, even when enhanced by W1, has some source issues when connecting to multiple devices.
I changed the complication to 'Current' ('Huidige' in Dutch, I assume 'Current' is the name in English) and all was well.
Strange that Apple crippled the 'Music' complication and created another with the right (former) behavior.
I don't think this article explains the change as well as it could. I have Watch OS 4, and I use it to play, pause, and advance music on my iPhone all the time. In fact, in Watch OS 4, it automatically goes to the correct screen when you play music from your phone.
What this refers to is if you are storing music on your Apple Watch, and you go to the Watch's music app (looks like an iTunes logo), everything in that music app is just stuff stored locally. If you start a playlist from your iPhone, you'll still have all the remote controls available.