Hello Bryan,
Just received my new MacBook Air M1 this afternoon and have been playing around and setting it up.
After starting to customize the settings to my liking, I noticed the same exact thing. The trackpad "clicks" as it is supposed to from the haptic engine. However when selecting "Silent Clicking" in the trackpad settings, nothing changes. The "clicking" is still there. I tried restarting the computer and clicking the option on and off, but nothing has worked as of yet.
I could not find anything regarding this problem on newer Macs until I found your post.
Any ideas on what it could be or does this mean a trip to the store? (I was hoping there would be an easy and obvious fix from a software update or something).
-Sam