It still is not resolved. I think they’re going to have to either pay Masimo or redesign their sensor before we’ll see spO2 again on Apple Watches.
Two other alternatives, neither terribly useful: keep your pre-ban watch, if you have one, or wait until 2028
when the relevant patent expires, assuming Masimo doesn't obtain another patent that effectively extends the current expiration date.
The problem with most watches sold before the import ban is that you end up having to choose between the blood oxygen sensor and the latest features, like sleep apnea detection. I think the Ultra 2 is the only watch sold before the import ban that will get the latest features and (depending on when you purchased it) also retain the blood oxygen function.
The fact that Apple hasn't settled this by agreeing on a license fee with Masimo might mean that Apple doesn't think that the blood oxygen sensor is important to people buying an Apple Watch.
I don't know if it will result in a change in how Masimo handles this, but earlier this week the Masimo CEO resigned after being voted off the company's board of directors (search for "Masimo founder Joe Kiani resigns as CEO following ouster from board").