Apple Watch Cellular Plan without an iPhone Cellular Plan

Hello,

Here is the situation: My daughter uses a Cellular Apple Watch S7 paired to my iPhone. It's great - as long as she has the watch on and charged I can see her location anywhere if needed during after-school activities. She can also text friends and call in case she needs anything.

I recently upgraded my iPhone 12 Pro Max to the 16 Pro Max, and then my daughter asked to have my old phone for games. Sure thing, no problem; I set my old phone up with her iCloud account (and we have family sharing and comm limits set up to keep her out of trouble.) She then proceeded to unpair her Apple Watch and re-pair to her phone. That worked, except that now her watch won't ring and the cellular service didn't transfer.

I spoke with AT&T and they swear that this isn't possible: to have a cellular smartwatch with a number paired to a phone without a cellular plan. Somehow that seems wrong. The Watch eSIM is basically stuck in my new iPhone's Watch app and I can't seem to get it transferred back to the old phone, which is now hers.