So this may have been resolved long ago, but here's the deal. The watch has a WiFi ship, but it wasn't enabled at first. They needed to re-certify it once the software could support it. I can confirm that later software updates enabled the WiFi chip on my G watch R, and it does work!
I've always assumed it was a Hard Reset button... Like when the software crashed, you could forcibly kill power and reboot the watch... never tested myself...