The Telegraph that there is no safety issue with the new Watch Urbane, but refused to give specifics on the problem in order to maintain "competitive and supplier relations". However, LG gave clues to the issue behind pulling the smartwatch from circulation:LG told
Given that there's no camera on the watch, the only component related to "image quality" would be the display. The display is a new component as well because it features a 480 x 480 pixel resolution rather than the 320 x 320 resolution on the original Watch Urbane. And, if we're talking about image quality over the life of the device, that sounds like an issue with image retention or burn.
Burn is likely going to be a consistent issue for smartwatches that attempt to use OLED displays, because unlike other devices smartwatch users are going to want the time constantly displayed on the device which will greatly increase the probability of retention until software tweaks are made to mitigate the issue.
source: The Telegraph