Low Power Mode is still supported and nothing should have broken. Only difference is that now it is possible to support "active" low power mode which means that the user can interact with the screen while the app is in low power mode (screen presses won't automatically wake up the screen).
Possible it's an issue with your watch where the SW is in a bad state somehow. Try restarting your watch and phone and uninstalling/reinstalling the host app and SmartConnect.