The posted solution is not even a solution, it's merely a workaround by using the built-in music control app instead of Spotify. So here's a new bug report.
Again, the issue, at least on my phone (OnePlus 3T) and my watch (Samsung Gear S3), the Spotify App is unable to connect to the phone via BT, even if the BT connection is actually established and works just fine for everything else, like notifications. When the "Remote" option is selected, the app loads really long and then displays the known "BT disconnected" error. The phone of course has the current version of Spotify running without any issues.
It has been months since this was reported, please give us some update on the progress, thanks.