I have a model 3 apple watch and when I try to use drafts with airpods in it will not dictate when using airpods. Mostly I am trying to take notes from a podcast episode when walking. If I am not using the airpods it seems to work fine with the native microphone.
How do you sound if you record a voice memo in a similar situation?
I use a series 3 Apple watch with airpods for this all the time. And so far it;s been fairly decent. Are you sure the airpods microphone is working?