Wow, that looks bad on a small wrist. That's basically a deal breaker for me. I also think that default watchface looks very tacky, though I'm sure that can be changed.
The Moto 360 suffered the same problem. Here's what it looks like in a promotional shot:
http://www.droid-life.com/wp-content/uploads/2014/03/moto-36...
And here's what it actually looks like on someone with thin wrists:
http://si.wsj.net/public/resources/images/BN-EK187_PTECH__G_...