While for watchOS 6 simulators the
WCSession.default.transferFile(...)
function from watchOS to iOS was already broken (FB7812483) while working flawlessly for watchOS 5 now with a Xcode 12 / watchOS 7 / iOS 14 beta combination that's still the case (FB7812526).
Other things like
WCSession.default.updateApplicationContext(...)
are now also broken (FB7806876) which makes it basically impossible to work with WatchConnectivity and simulators for watchOS 7.
I used https://developer.apple.com/documentation/watchconnectivity/using_watch_connectivity_to_communicate_between_your_apple_watch_app_and_iphone_app as an example project but originally discovered those problems in another app.
I'm a big fan of Apple Watch but this situation makes it really hard to properly develop for it.