I think a lot of Folks here are still conflating what The Children of the Watch believe with ALL Mandalorians.
In Attack of the Clones with Jango, and then throughout all of Clone Wars and Rebels, Mandos took their helmets off all the time. Even Pre Vizsla (voiced by Favreau), head of the Death Watch, took his helmet off all the time and only put it on for battle or business. The only Mandos who didn't were the generic background canon fodder and that was most likely done to save on budget, like how the non main character Imperial Officers in Rebels had their hats pulled down to obscure and save on animating the top half of their faces. And I can guarantee that Sabine is not going to be keeping her helmet on all the time in the upcoming Ashoka show.
When we, the audience, are introduced to this idea of the Helmet rule in Season 1, I think it was deliberately done to shock us long time Star Wars fans who had followed Filoni's previous work, to shake us out of our complacency on Star Wars and make the point that we might not know what is going to happen next. Then in Season 2 we get re-introduced to Bo and her crew who take their helmets off immediately. When Din expresses his shock and slight anger or disgust, we can pretty much see Bo and Crew sigh, roll their eyes and go, "Oh, he's one of those folks." So then it is clearly established that no, not ALL Mandalorians believe they must keep their helmets on at all times, but there are SOME that do, and those that do are not the Main Stream or Majority.
To everyone saying it's not normal, or its weird, or its over the top, yeah, that's the point. This behavior isn't "normal," and the vast majority of Mandalorians in the universe agree with those sentiments.
But it is a clear, easily identifiable representation of a system of beliefs. It is a clear and straight forward way to demonstrate the characters internal struggle. Din's struggle to decide what is important to him, what really matters, and what he wants to do and be, the drama of that was only served to be elevated by having a concrete action for him to take. Is Grogu more important than this easily demonstrated physical action. It can be hard to show a character's inner turmoil in a visual media, but having this simple action of taking off his helmet or exposing his face telegraphs to the audience, this is the moment, this is the choice.
It's a visual short cut to show a dogmatic belief and clearly delineate the members of the CotW from other Mandos, and to show the complexity and struggle to define what it means to be a Mandalorian, and how that definition can vary.
I think it will be interesting to see where we go with this for the rest of the season. Has Bo kept her helmet on for the past Episode and a half simply because she is trying to play nice and potentialy recruit the CotW to her cause of retaking Mandalore and reestablishing their home, or does having seen the Mythosaur and having her beliefs shaken while at a low point in her life caused her to question who is right, her way or the CotW's way.