It does however make the phone slightly less secure. If ANYONE* with a mask on comes to the phone and is right next to you, while you are wearing the watch, and they swipe up, it'll unlock. If you are awake (and notice the haptic feedback or unlock sound on your wrist) you can indeed instantly re-lock it. If you are asleep though... or not paying attention (like at a restaurant, whatever), and have your watch on, someone could easily come up next to you with a mask on, or simply pick up your phone off the table, and unlock the phone.
And it doesn't have to be a mask. While just covering your face with a hand doesn't seem to work, (or having no face there at all, or a full face) any pair of eyes with something (like a napkin) covering the nose and mouth does unlock the phone if you are within a foot and have this enabled.
You just have to remember if you are worried about scenarios like this to emergency lock the phone manually (holding down both volume button and the power button) once to disable faceID for that time period. Or put it in your pocket.