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Apple WatchOS 7.3 update requires 2.7GB?

I am updating my watch OS to 7.3. And the download is 410MB. I receive an error that says I don’t have 2.7GB available to install the update. I remove all of my apps, photos, songs, etc. and so there is nothing else I can remove and I have 2.4GB available. Do I have to do a full reset just to install an update? Why is so much space required to conduct an update that it essentially can’t be done?