One of the major features announced as part of Android Wear 2.0 at Google I/O last year was standalone apps. Similar to Apple's "native" apps introduced in WatchOS 2, Android Wear 2.0 can allow an application to run independently on the smartwatch itself - no tethered phone required. Not only that, but Google itself is utilizing the feature right out of the gate to the great benefit of one of the core experiences on Wear, Google Assistant, in the form of voice commands and transcription performance.
On 1.x versions of Android Wear, your smartwatch captured the audio of your voice query and then sent it back to the smartphone, which then sent it up to the cloud for processing and pulled back down the final result, which then was returned to the smartwatch. This took a substantial amount of time, because the phone essentially had to do all the heavy lifting and send a lot of things back and forth. In Wear 2.0, the Assistant will run directly on the smartwatch, with either the phone's Bluetooth acting as a tether, a Wi-Fi connection, or LTE allowing the watch to send the data directly up to the cloud, and receive data directly back. Google claims that by removing the phone from the equation, you'll see dramatically faster voice queries and transcription on any Android Wear 2.0 device, not just the new LG watches.
Of course, standalone Assistant also means that your phone no longer has to be anywhere near your watch for voice queries to work, so long as it has a Wi-Fi or LTE connection to use. When connected to your phone and not on Wi-Fi, though, the watch will use Bluetooth as a tethered connection to the internet via the phone for such things, which should still be much faster than the way things work currently.
Now, this is not the same as actually doing the transcription on the watch - that's not happening - but you are getting a much more direct path to the cloud and subsequent results than before. So, as long as your watch has a solid internet connection, you should see major improvements in terms of the speed of voice queries and transcription. Good stuff. And again: this feature will come to all smartwatches getting Android Wear 2.0 - of which we have a list, right here.