I'm not sure if there is a real fix in the pipeline yet. I upgraded to the 11.2 beta, and it definitely reduced the frequency with which the problem occurs, but it still happens to me at least once a week. Unplugging/replugging sometimes fixes it, though I usually reboot it so as to not put so much wear and tear on the USB-C plug. They don't seem nearly as robust as USB-A or lightning, and they get loose alarmingly fast if you use them a lot.
I also have an intermittent problem with my M1 MacBook not recognizing that I've got the charger plugged in, when it is connected to the Apple multiport adapter (which definitely supports PD pass-thru). Changing to the other USB-C port or rebooting fixes that, but it's another annoyance. The reality is that MacBooks are pretty great as mobile devices (the battery life on this M1 is remarkable), but as a docked workstation they are a little rough around the edges.