Well I think we can see how Tesla intends to simply the Model 3. By removing items off it.
No parking sensors obviously.
No Fog lights
Smaller headlight
Removal of stalks
I assume the wheel air curtain happens now behind the bumper rather than in the front. They may have incrementally improved drag with the new front and rear bumpers.
The over all effect makes the car look pretty plain, and the model 3 was already a clean car with out much fussy styling.
I'm not convinced that HW4 is going to go into the Model 3. If it was going to roll out in that model we would likely already see it in that model as we are already seeing it in the model s and x. HW2 to HW3 involved a processor upgrade of ~6-7 times the processing/ (~10 times)data handling capability of the earlier generation. While HW4 is 50-100% increase and mostly through parallelism, HW4 may be designed for use in larger vehicles with more sensors, than more capability on smaller vehicles. HW4 also has higher power draw, which will result in reduced range for smaller vehicles like the model 3 and model y. HW4 is designed to operate on things like the Cybertruck and the semi, HW3 was not designed for those applications.
The space that the model 3 and model Y are going is lower cost, not feature explosion. Tesla is under significant pressure in China, and the pressure is from price, globally the pressure is also price, Tesla sells more cars, the cheaper they get. While improving the FSD hardware is nice, its not driving sales. HW4 is required for high value and physically bigger vehicles like the Cybertruck and semi. The S and the X are expensive models not price sensitive really, so they can also have the same tech and increase volume numbers.
Model 3 and model Y are produced in volumes in the millions now. Saving cents now matters on those vehicles.