Can Apple Watch activity tracking be thrown off by movement?
Yes it can. Only exercise uses heart rate currently to gauge effort. I know of several people that figured out how to game the stand goal while flying in an airplane by just moving one forearm. 

The accelerometer algorithm for standing can't really tell why your hand moves when it is checking for sedentary conditions. This is probably a known issue since preventing this would also reduce the accuracy of legitimate walking about so it’s probably an engineering trade off as opposed to something Apple didn’t consider.