It seems that the simulator doesn't handle pulse_set_draw_window() the same as the watch hardware. To draw a 2x2 box on the watch, I run:
pulse_set_draw_window(x, y, x+1, y+1);
for(int i=0 ; i < 4 ; i++)
pulse_draw_point24(color);
But in the simulator it produces a 1x4 box, as you can see in the screenshot (this also causes noisy edges in the sides):