When I first built my app & Watchkit app, I had the "Associated Domains" capability enabled. I've disabled it in the "Capabilities" panel of both the watchkit extension and the companion app, and confirmed that the key is gone from each info.plist.
I have gone to Apples' "Certificates, Identifiers and Profiles" page, selected the App ID for each the Watchkit App, The Extension, and the App, unticked "Associated Domains", regenerated the provisioning profiles for each, downloaded and installed them.
I've done a Ctrl-Shift-Command-K complete clean, reboot, and rebuild. On sumbission to the appstore I get the error message below.
I have done a project search within xcode and cannot find a com.apple.developer.associated-domains key. I've searched the build directory, nada. I don't believe this key actually exists in my code, and yet iTunesConnect seems to think its there and set to '*'.
To fix this issue:
You will have to regenerate any provisioning files associated with the App ID. For some reason the "Associated Domains" got checked for my app. Deselecting it made the AppStore submission work.