I'm not expecting the Watch to have its own GPS radio. It's a useful iPhone accessory, not an iPhone replacement. I don't think the MSFT Band2 is meant to be a phone replacement, either. So, how important is GPS to outdoor sport tracking? Does it provide a holy grail of sports metrics? I say it can be useful in training, but avoid relying on GPS in any race situations.
Races are hand-measured, never with GPS, with most courses marked at every km/mi. Popular races are often run in urban environments with paths between buildings, under bridges and through tunnels. You're often elbow-to-elbow with racers, sometimes on trails though towering foliage. You may have heavy cloud cover, rain or snow. All of these things lead to errors in the best GPS trackers. Even under the most ideal conditions, all GPS trackers' raw data is littered with errors, most of which you won't see thanks to post-processing algorithms. The resulting data is a product of "smoothing" using moving averages and trashing of implausible waypoints. The variables are very complex, the output distilled and prone to error.
If you're in a race, use a stopwatch with a lap counter. Better performance metrics can come from stride cadence and heart rate sensors. Use GPS for training routes.
Maybe one day race officials will open up chip timing to watch developers or include location-aware Bluetooth checkpoints on race routes, but as it's stood for nearly 10 years, GPS is not good enough on race days.