I have been having the same problem with my new 13" M1 MBP. It 'seems' to occur after the unit has gone to sleep at some point. I am using the MBP in clamshell with an 32" LG monitor with a Mokin dock. At first I suspected it was the dock, so I ordered an HDMI adapter (Anker) and experienced the same problem. I had been being forced to Cmd-Cntl-Eject on y bluetooth keyboard to force a restart at least daily. Today I tried MrToney's solution (Thanks, MrToney) using the user icon on the right side of the menu bar and selecting "Login Menu". This is a much better solution - but shouldn't be necessary.
I can't believe this issue has been marked as solved (recommending a restart). The problem still exists in 11.2.3.
Hopefully, Apple will still investigate and provide a fix for this recurring and aggravating malfunction. Thanks.