I’m trying to figure this out as well with my 2021 12.9” iPad Pro. I had previously purchased a few USB4/Thunderbolt 3/Thunderbolt 4 cables from cheaper brands in anticipation of getting my 2021.
The cables worked for data in USB3 mode with my 2020, but simply wouldn’t connect my iMac to my 2021 (like you said, only work for charging). Worse, if I powered on the 2021 by plugging it in via Thunderbolt cable, the port would simply die after I unplugged it, and require a reboot before it worked again.
I went and bought an Apple Thunderbolt 3 cable just to rule out my third-party cables, but same thing. Connecting with a regular USB-C (either 2 or 3) cable works just fine for data.
There have been a number of reports of specific Thunderbolt 3 SSDs also not being recognized at all by the 2021 iPad Pros, even though most of them seem to work fine (albeit extremely slowly). This appears to be a software problem with iPadOS 14. For now, you’ll have to keep using a regular old USB cable until Apple can finally fix this.
On a side note, I’ve just spent 20 minutes with an incredibly clueless, rude and impatient Apple support representative, who cut me off instantly to try and kick me off to a different department. She had no idea what Thunderbolt even was, and was unaware that iTunes no longer exists. She kept insisting that I “plug it in to iTunes instead of Finder,” cut me off when I tried to ask if she meant the Music app, and kept telling me that my iMac had 4 USB ports (never mind the fact I had already told her over a dozen times my issue was with Thunderbolt, and that USB worked fine). Then she again tried to kick me off to a different department.
My experiences with Apple support over the past 3–4 years have all been a complete waste of time, and I’m quite confident to say that Apple now has the absolute worst customer service in the industry, by a pretty wide margin. They always go for the most disruptive solution (make you wipe your device and tell you to set it up entirely from scratch, because “software corruption”), and refuse to replace a device in perfect cosmetic condition that exhibits intermittent, hard-to-reproduce issues, just because hard-to-reproduce means it can’t possibly be a hardware problem.
[Edited by Moderator]