I finally got out of recovery mode of my Pebble Original.
- Place the watch on the charger.
- Press and hold the right bottom button for 10 seconds (this will do a factory reset while you are in recovery mode)
- Clear the bluetooth pairing from the phone.
- Try reconnecting the watch from the Bluetooth settings menu on your phone.
- Finally launch the watch app and continue updating your watch.
I can't reconnect to the watch in step 5, even it's paired with the phone already. But I closed the watch app completely (open task list, swipe it away) and reopen, try reconnect again and it works. Then there is one more update and when the update is completed, the PO finally got out of the recovery loop. I think step 2 is the key (which I didn't try this previously)