Bike Sensor disconnects with Suunto Race

[simspi]

Since some firmware updates ago, my Suunto Bike Sensor connected to a Suunto Race doesn’t work as expected. When doing a ride with the Bike Sensor connected the distance reported is by far incorrect (32km instead of 25.5km). In addition the cadence measurement only shows some samples with many dropouts in between. I double checked the circumference setting, reconnected the Bike Sensor in the watch, checked magnets are placed correctly (green and red LED comes up) and replaced the battery in the Bike Sensor however with no luck. When checking the Settings => Connectivity => Connected Devices menu on the watch, one can see the Bike Sensor connecting / disconnecting approximately every 10 seconds. However when I use my smartphone to establish bluetooth connection to the Bike Sensor, the connection remains stable.
The problem most likely started with the firmware update that dropped all connected devices (heart rate belt and Bike Sensor).
Is there any advice regarding how to fix the issue? Because I already tried quite a number of troubleshooting steps I suspect it is a firmware issue. Are there other users seeing the same issue?