Thunderbolt evolved out of Firewire. So initially it was seen as an improvement over USB. The TB1 spec allowed for a max throughput of 10gb/sec. The Thunderbolt display is TB1. It was released in 2011 with the initial Thunderbolt spec.
The adapters built into the cable as well as the port used the Mini Display Port (MDP) adapter, but a thunderbolt cable is not compatible with MDP cables, as Thunderbolt includes other protocols and different wiring.
For the most part TB2 cables work with TB1 devices, and the MDP connector was retained when TB2 was released in 2013.
When TB3 was released in 2015, apple changed the port to a USB-C connector. For this reason, to use your thunderbolt 1/2 device with current Apple computers that come withe the USB-C ports, you need an adapter to adapt the Thunderbolt MDP.
This is the Thunderbolt2 to 3 adapter I'm sure you've seen mentioned.
Previously, it was not a problem to daisy chain multiple Apple Thunderbolt displays with various mac laptops, imac's etc., but with the new M1 chip, the hardware/firmware apparently doesn't support more than 1 Thunderbolt display, so this thread is basically serving to point out this limitation to a lot of disappointed people. I have a Thunderbolt display myself, but only 1, so this is not a personal concern to me, as I always used it as a 2nd display with a macbook pro, but I understand that this engineering limitation is frustrating to a lot of people who were attracted to the advertised price/performance benefit of the M1 based mini.
What does work with the m1 mini's, is to use a thunderbolt display and an hdmi display so that's a viable path to have 2 displays, and one I am considering. My biggest issue with purchasing an M1 mini is that apple is upcharging $200 to go from 256gb SSD to a 512gb SSD, as I know that 256g isn't going to work for me, given what I do as a developer and occassional 4k video editor -- but that is another story.