What does John 7:21 mean?

Here, Jesus refers back to the prior year's Feast, where He healed a man at the Pool of Bethesda (John 5:1–9). The reaction of local religious leaders to that sign was extremely hostile (John 5:10–17). Most of that hostility was focused on the fact that Jesus had healed the man on a Sabbath day, contradicting the Pharisees' traditions. This controversy led Jesus to claim that the Pharisees had all the required knowledge of God, but refused to come to Jesus in the way God intended (John 5:37–40; 6:29). This was also a reason Jesus stayed away from Jerusalem—and the direct influence of her religious leaders—for quite some time (John 6:1; 7:1).

In the next verses, Jesus will point out that even the Pharisees believe in performing certain spiritually-based works on a Sabbath, such as circumcision. Jesus will develop this example to show how their criticisms are ultimately invalid.