Oxygen sensors used in car catalyst systems use a different effect based on electrochemistry. I see no reason that couldn't be minuaritized to grain-of-sand size.
The question is if oxygen levels are as good an indicator as CO2 levels... I suspect not.
I had a project miniaturizing nasa tech for detecting hypoxia with o2 and CO2 sensors. It used a phosphorescent dye that changed a delay flash (ie you blinked a light, the dye would absorbed and blink back after a delay) based on temp and o2.
CO2 was measured with infrared but water also absorbed it, so you need to heat things up enough to not have water. It can be small, but not watch small.
All and all interesting stuff!
Electrochemical pile style oxygen sensors continuously deplete themselves whether actively measured or not. Common smart home oxygen piles have a fixed lifetime of a few years, and they're quite sizable (probably about as much volume as a whole smartwatch). Putting the same chemistry in an even smaller package would likely result in lifetime measured in hours
The ones in cars need to be heated up quite a bit in order to work, and you still need reference air. Otherwise, I'm pretty sure that CO2 isn't a problem but rather an indication of a lack of oxygen in the first place, so it technically could work... just not if you're measuring the environment itself.
I don’t think we actually care about co2 levels. I think we use them as a proxy for o2 levels (same as our bodies do). So your idea would be great.
Based on numbers, O2 concentration is probably not a good indicator.
Clean air contains about 20.9% O2 and 0.04% CO2. At 2000 ppm CO2, which according to the author is bad enough to impair judgement, that's 0.2% CO2, it that CO2 is the result of respiration, it means that about 0.2% O2 was consumed, so that's a drop from 20.9% to 20.7%, a very small difference. 20.7% is not low enough to have a significant effect, the CO2 itself is the problem, not the drop in O2. And using O2 concentration as a proxy for CO2 doesn't look reliable to me: the difference is small and other things, like humidity can affect O2 concentration.
As for the sensor, O2 sensor in cars compare the O2 concentration between the outside air and exhaust gases, it needs outside air as a reference, but what you are measuring is the outside air itself, you don't have that reference.