There is ThumbKey on F-Droid that, if you get good at the layout, I imagine would be ideal for that phone.

I can't help you with the keyboard recommendations, but I just want to say that thing is hilarious. I kinda want to buy one just for shits and giggles when I whip it out at the bar.

I just use swipe typing, but my dad absolutely loves MessagEase, which is basically a 9-key keyboard. The gimmick is that every letter is a gesture; nine letters are just taps, and everything else (including some punctuation) you start on one of those nine keys and swipe in one of eight directions (up, left, upper left, etc.). I think there are a couple of other large keys, like a space bar at the bottom and delete and "switch to numbers and extra punctuation" on the right, but you mainly use the nine for words. It's not terrible, and he's gotten moderately fast at it. Might be worth a look.

Edit: Oh, I've just seen that MessagEase is now unmaintained, and the "thumbkey" mentioned in another comment is basically a replacement. So I guess this is just another recommendation for that keyboard! Oops.

There's also Minuum if you're interested in trying it out.

https://play.google.com/store/apps/details?id=com.whirlscape.minuumkeyboard

As a Jelly Pro user, I am currently using Traditional T9 keyboard. On-screen keyboard functionaly was recently added there, and it performs great on a 2.45" screen.

I use a compact mode in AnySoftKeyboard, which might work well for tiny screens! The keyboard is only 5 keys wide, and most keys have two corresponding letters (double tapping to type those letters). It is quite nice even on normal sized phones for individuals who are prone to mis-tapping resulting in typos like myself, I recommend giving it a try.

I use this OpenBoard fork:

https://github.com/erkserkserks/openboard/releases

It has Swype-like gestures and it's very accurate even if you swipe fast and without paying too much attention.

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I use MessagEase keyboard. It's a has sizable learning curve. When I was learning I would only do crosswords. But now it's basically all I use on my phone in most situations. I would consider it quite close to T9

I actually have a friend that uses such a small phone, they use a regular querty keyboard, just usually in combination with glide/swipe typing. I don't think you can install WearOS keyboards, and afaik the default keyboard on WearOS is a full-size querty anyway...