I'm not sure that "PIN + hardware dongle that requires continuous skin contact" is meaningfully less secure than a fingerprint sensor, but at least Apple puts you in the driver's seat to choose the level you're most comfortable with.
I've found the Bluetooth connectivity quite reliable. When it doesn't work, it's because the watch re-locked itself.
As a watch user i will also say that the Bluetooth wake is unreliable enough to make this a poor replacement. Frustrating, even.