The tvOS 14.7 update is free and can be downloaded via the Settings app on the Apple TV by going to “System” -> “Software Update.” If you have automatic software updates turned on your Apple TV will be upgraded to tvOS 14.7 automatically.
There were no new tvOS features discovered during tvOS 14.7 beta testing, so it is not clear what’s new in the update. The tvOS 14.7 support document says the following about the update:
What’s new in tvOS 14.7
This update includes general performance and stability improvements.
tvOS 14.7 may be the last major update to tvOS 14, as Apple turns most of its attention to iOS 15, which is currently being beta tested and is expected to be released to the public in the fall.