If you can't boot to regular macOS Recovery Mode, use Fallback Recovery OS.
Select Options and then continue with the required administrator password. Restart your Mac and continue holding the power button until you see the startup options window. Since your File Vault is on and you can't erase the startup disk directly with Disk Utility on the M1 Mac, you need another way to get your Mac prepared, i.e., get existing data cleared. Guide to reset a bootable M1 Mac to factory settings Resetting M1 Mac is based on if the Mac is bootable and if you want to keep the data on the computer, here is the complete tutorial. You are not recommended to directly erase the startup disk in Disk Utility though you can do it most of the time and reinstall macOS as you did on the Intel-based Mac. No matter what is the reason you want to reset M1 Mac to factory settings, there is one thing you need to pay attention to. You need to replace or exchange the M1 Mac with Apple.You are experiencing an unpleasant performance with the current macOS, like MacBook Pro screen flickering.
For some reason, you may want to reset your new Apple silicon Mac.
