Stryd works great with my Garmin when running outside, but not on the treadmill. Why is that?

Garmin watches uses ANT+ to connect to Stryd. ANT+ is not as reliable as Bluetooth since it is connectionless (like UDP vs TCP). In particular, the ANT+ connection can be disturbed when there are lots of other signals around. 

For example, indoor where there are my WiFi, Bluetooth, and other signals, the Garmin watch may not be able to connect reliably with Stryd. If you experience problems running indoors, try to eliminate as many signals as possible (we have had reports that removing the mouse Bluetooth dongle from a computer fixed the problem for one Stryder!).

You can also try to record a run indoors with the Stryd app on your phone (since the phone will use Bluetooth to connect).