Apple Diagnostic M1 MBP Freezing

It's not just an issue with Diagnostics crashing. I've personally experienced an odd issue regarding Bluetooth immediately after updating to 11.3.1. This is the initial reason that prompted me to run Diagnostics in the first place. I posted the contents below elsewhere but feel it's appropriate here as well:

Specifically in my case, after my M1 MBA was "successfully" updated to 11.3.1, I turned off Bluetooth to test something. When I went to re-enable it, it asked me for my admin password (very odd, never seen this) to enable it. Once I entered it and enabled Bluetooth again, I could not disable Bluetooth any more...reboots/shutdowns didn't help. I then decided to run Diagnostics (accessed differently on M1's). Diagnostics opened and allowed me to begin running it. The progress bar came up and the system immediately froze. No trackpad click, nothing. This required me to force-shutdown (press & HOLD the power button until shutdown). No amount of trying would get Diagnostics to complete...it always froze immediately in the same way described above.

I wiped the SSD and reinstalled 11.3.1 from scratch which then fixed the Bluetooth issue but Diagnostics was still freezing. What good is diagnostics if it crashes/freezes?

I made a Genius Bar reservation where they verified the issue. (Some content omitted below due to perhaps embarrassing someone)

I left the MBA with them to repair it which they did (it took two days). I verified Diagnostics was working correctly when I picked up the repaired MBA.

After getting the MBA back, I initially tested the MBA but then wiped the SDD & reinstalled 11.3.1 from scratch because I wanted to start with a perfectly clean slate because of the initial Bluetooth issue. The install went well and I had my MBA back up but did zero setting up on it. I shut it down to run Diagnostics which now ran fine but was now reporting a possible problem with the power supply. I shut down, disconnected the power supply and then restarted diagnostics...again with a reported possible power supply problem.

The MBA ran 100% fine otherwise. Because the OS was just cleanly installed, I again wiped the SSD, then reinstalled 11.3.1 from scratch to test. After it was finished, I again ran Diagnostics which now completed without any issues. The MBA is back to normal now but this makes me think that the 11.3.1 update is somehow corrupting the firmware or causing some kind of issue with how Diagnostics is performing. The firmware is updated (if an update is required) when the OS is updated...this was also verified by another different Genius in the Apple Store.