I know this happens if the battery swells up, but I do not see a spicy pillow in there. That battery is flush with the Digital Crown reader, and it only pops out if I shift the screen away from the Digital Crown (towards the connector). It’s an S1 circa mid-2017, at one point I replaced the screen on it (myself, not got a refurb watch from Apple) which is probably related. It’s also no longer my primary watch, it’s a sleep tracker and a backup in case I forget to charge up my S6 overnight. Lucky bonus, if I do need to replace the battery, the Force Touch sensor is still good so I can reuse that.
When you replaced the first battery did you use a new seal or try to reuse the old one? I did the battery in my wife’s S0 years ago and getting the seal just right was tricky.