I know of Azure SQL Edge, which has significant limitations, but I don't know how to run MS SQL Server on an M1 at anything more than glacial speeds (i.e. full system emulation in Qemu). Is there something I don't know about? Please share!
That's 2019. I haven't tested 2017 or 2022, but I assume they don't work either. AFAIK the official advice is to use Azure SQL Edge instead.
But that doesn't answer the question of "does Rosetta deal with it properly?".