What do you mean by "carrier exception"? Exception from policies those same carriers set up decades ago?

Not exactly. Early cell watches were not going to meet the existing carrier standards and so they received specific exemptions from the carrier to operate on their network. Over the years the carriers have created requirements that are specifically for these devices, that are less stringent than what they require for a cell phone on their network. They still give specific exemptions if a watch is "close" to meeting a requirement but can't quite get there.