What is the 'ghost touch' issue affecting Apple Watches?

Apple acknowledged 'ghost touch' issue that causes affected smartwatch displays to register false touches, "jump erratically" and behave unpredictably without user input. Initially, it was believed to affect Watch Series 9 and Ultra 2 models, however, it was later confirmed in Series 7, 8 and Ultra 1 models too. Apple asked service providers to fix it through a force restart.