Same problem here with my M1 Macbook Air: Every few days after waking the Macbook up (using it in clamshell mode with an external LG monitor), the left side of the menubar is unresponsive. Hot corners also don't work (that's usually how I notice it, because I use the upper left corner for Mission Control).
I haven't found a real solution yet, BUT: You don't need to reboot to fix it, logging out and logging in again is enough.
How to log out if you can't use the menubar: For Alfred users, it's easy, just type "log" in the Alfred search window and it shows a "log out" option. If you don't use Alfred, you can use a terminal command:
launchctl bootout user/$(id -u username)
Where you replace "username" with your actual username (if you want to log out other users this way, you need to use sudo). You could also create an alias for this. Open a terminal, edit .zshrc ("nano .zshrc") and insert this line:
alias logout='sudo launchctl bootout gui/$(id -u username)'
Yep, slightly different as the command above, I just copied what's in my .zshrc. Both works.
Not really a solution, but at least it's more convenient than rebooting.