itms-90562: invalid bundle – one or more dynamic libraries that are referenced by your app are not present in the dylib search path.
ALWAYS_EMBED_SWIFT_STANDARD_LIBRARIES build setting like this:
App target (main target) — set to NO (mine was YES)
Watch target — set to YES (mine was NO)
Watch App Extension target — set to NO (mine was YES)
Edit: I figured this out by creating a new, empty watch project in Xcode 8, and cross-referencing the differences between build settings in the new Xcode 8 template project, and my crusty old ancient project. The settings above are what the Xcode 8 template project has.