Magic Mouse 2 connected but doesn't work (Macbook Pro)

Hi all (first post),

I used to have a 2017 iMac on Catalina 10.15.7 (Bluetooth mouse and keyboard worked great).

I now migrated to a 2019 Macbook Pro running Catalina 10.15.7 as well. When Magic mouse 2 is connected via USB, the bluetooth immediately recognizes and connects. As soon as I remove the wire, and click "open mouse preference" it shows no mouse found and "searching" continues.

I've reviewed multiple Magic Mouse 2 fixes

-89% charge

-Making sure the mouse is switched on (prior to computer turning on as well)

-Command+Shift to debug bluetooth, remove all devices and reset up the mouse.

Only thing I haven't tried is updating to Big sur. I'd like to avoid this update due to work flow reasons

Anyone have any ideas? (thank you!)

Update: I tried to bluetooth connect my Jabra Elite 65T headphones (not technically supported) and the Apple Magic keyboard, both of which didn't work. could this be a blue tooth issue?