That doesn't make sense. Huawei clearly believes the circular screen isn't a failing or they would have made a different watch.
You may not like circular smartwatches (I certainly don't), but that just means this watch is not for you. Plenty of people want them (see the pre-release excitement over the Moto 360, for example). This watch is for them.
I don't view truncation as a major product fail. Would you also categorize iOS and/or Android notifications as fails because they truncate the important parts of notifications?
Besides, in the screenshot you linked to -- you can pull the card up a bit to reveal the rest of the text if you're interested.
95% of the time is showing a watch face. You can also pull up the "half-card" notification to read it just fine; the horizontal insets ensure the entire text on the card is readable when the notification is "expanded".
...and the other 5% of the "time" is showing the hands? :-)
I think the biggest gripe with showing straight lines of text on what is essentially a curved viewport is that mix of curved/straight just doesn't feel quite right. It has the same feeling to me of looking at an old CRT TV with the corners of the image rounded off.
I don't know if displaying the text curved to match the screen would be any better...
http://i.glui.me/1EetEHO
Why emphasize a major failing of your product?