Apple has seeded watchOS 7.4 beta 7 to developers for testing. The build number is 18T5194a.
When combined with iOS 14.5, watchOS 7.4 will enable Face ID with face masks as long as your Apple Watch is unlocked and paired with your iPhone. More details here.
There are no new developer release notes for this beta software update. You can find the release notes from beta 2 here.