To read the turning of the bezel, the Galaxy Watch uses a different approach than the optical encoder of the Apple Watch.

There are three hall sensors (Seiko Instruments) on the small PCB, at the same distance from each other as the grooves on the bezel.

And every third groove has a small magnet inside.

When the bezel is turned, two of the three sensors read a change in their magnetic field (either on/off or off/on). The third sensor does not read a change. With this method, it can be clearly determined in which direction the bezel is rotated.