Apple Stores are no longer replacing Stainless Steel Series 3 Apple Watches and Hermès models with a replacement Series 3 Watch. Instead, the Genius Bar and Apple Authorized Service Providers will be replacing all stainless steel Apple Watch Series 3 and Hermès models with a stainless steel Series 4.
Firstly, Apple sent Apple Store repair technicians and authorized service providers a message regarding this policy change. It states that if you send your stainless steel Apple Watch Series 3 to repair, you’ll get a stainless steel Series 4 Apple Watch replacement instead. This is due to the shortage of replacement stainless steel Series 3 casings available for repair centers and providers.
Secondly, this affects all of the Apple Stores and authorized service providers globally. On the contrary, it is unsure if Apple is doing the Series 4 replacements and the Series 3 stock shortages for a temporary measure.
Lastly, Apple has been doing these types of new Apple Watch replacements a few times already. They were replacing 42mm Series 1 and 0 Apple Watch with Series 2 replacements back in January, when these older models were short of stock. This helps Apple to let users upgrade their older, malfunctioning Apple Watches to a newer generation replacement watch.