As previously mentioned, FlickType developer accused Apple of rejecting his app in favor of own solution announced with Apple Watch 7. AppleInsider provides more info on this story.
Turns out that screenshot provided by Kosta Eleftheriou is actually from 2019. And Apple did actually approve his app later on. Moreover, Kosta was able to earn a lot on this app. More keyboard apps for watchOS were published since then. And FlickType is still available for watchOS, Apple welcomes new updates to this app.