I made small package https://github.com/JuliaPluto/BetterFileWatching.jl which can recursively watch a directory for changes, including changes to file contents. It uses Deno (made available through BinaryBuilder) to access its watchFs standard lib, which is well-tested and widely used. A possible disadvantage is the ~30MB binary dependency of Deno.
Maybe it's useful to LiveServer.jl, but if you are happy with the existing file watching system then it's probably not worth the switch.