If you use a TB3 dock with DisplayLink, you can use multiple external displays on a M1/M2 MBA.
Beta support is there in DisplayLink software on macOS for scaled 4K displays, but it does not provide full colour bit depth. The colours are washed out and the display lacks contrast.
So yes, Display Link works, but it’s not a solution for anyone wanting a Retina experience.
I’d be pleased for someone to tell me in wrong and show me how it can be done!