I guess it mostly makes sense to release a price-matching competition to the Apple Watch Ultra; and potentially, low yields from 3nm can be compensated by producing smaller chips (akin to chiplets).
Samsung's next generation of flagship smartwatches is now believed to be the first of their line to debut with a 3 nanometer (nm) processor, made using the OEM itself using its latest techniques. Should that be the case, it would also mean that the Watch7 series would beat even Galaxy S24-series smartphones to this potentially significant upgrade.