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.
In the changelog, Apple notes an issue with the Podcasts app...
● Saved episodes might not appear or download on watchOS. (72434925)
Developers can download the watchOS configuration profile from the link below. Please download the iClarified app or follow iClarified on Twitter, Facebook, YouTube, and RSS for updates.