This isn't specific to the M1. I had my MBP 2016 13" die in the same exact way about two years ago. Same failure mode where it just refused to boot no matter what I did, though it was possible to sort of turn it on if you left it alone for a couple of days. Was able to use that to pull the data off the machine and create a Time Machine backup, but it turns out that Time Machine can lie to you about having completed a backup so I would have lost all of my data were it not for the manual backup I performed.

What was frustrating to me was that I knew my model had a diagnostics port that allowed direct access to the SSD (see https://9to5mac.com/2016/11/24/apple-special-cdm-tool-macboo...) to pull the data off of it, but the service wasn't offered when I went to get my machine repaired. I was forced to accept the data loss from having the logic board replaced.

I later had bluetooth issues on the same laptop, and that required another logic board replacement. Which, surprise, came with data loss once again. Also had a lot of fun learning with that repair that Apple changed the extension backups are stored as, and Time Machine can't recognize the new one as a restore source for some reason unless you rename the folder to use the old one. Wasted quite a few hours on that, and Apple's phone support had no idea about why Time Machine wasn't seeing it.

Anyway, moral of the story is, backup often, and have more than one backup method, unless you like losing your data.