First off, they are idiomatic. Their meaning is associated with the whole phrase rather than with the individual words which are not to be taken literally. “Watch your head.” literally means “Keep looking at your head.” which is not physically possible.
“Mind your head.” is related to “Keep your head in mind.” and literally means “Be aware of your head.”
I hear both versions in American English. They really mean the same thing, but “Watch your head.” is more likely to be used by males and “Mind your head” is a softer version more likely to be used by females. I would say it is because “Watch” is more of a direct command to action, whereas “Mind” is a suggestion that your attention is needed for something and lets you decide the rest on your own.