According to Apple’s release notes, the software provides an important security fix to address a WebKit bug that could allow maliciously crafted web content to arbitrarily execute code.
Released March 8, 2021
Available for: Apple Watch Series 3 and later
Impact: Processing maliciously crafted web content may lead to arbitrary code execution
Description: A memory corruption issue was addressed with improved validation.
CVE-2021-1844: Clément Lecigne of Google’s Threat Analysis Group, Alison Huffman of Microsoft Browser Vulnerability Research
watchOS 7.3.2 can be installed on a compatible Apple Watch via the Watch app on the device’s attached iPhone. Go to “General” -> “Software Update” to install the new software. The Watch should have at least 50% battery life, be connected to a charger, and be in the range of the iPhone.