I have to report, that despite no one knowing about this bug in these support forums, I contacted Apple Support and REQUESTED THAT THEY RUN DIAGNOSTICS. I was rather stunned that the Senior Support Agent I was speaking with did not know how to run diagnostics on an M1 Mac or how to properly access the diagnostics partition. I tried to correct her, but continued to do it her way, and of course she was not able to run diagnostics on my Mac.
So I requested she share my screen and take screenshots, things that none of the previous Apple Support Technicians I spoke with even suggested (running diagnostics, gathering log files, taking screen shots, notifying their development engineers etc.)
I also have to add that after speaking with this support technician (1 of 7 about this problem). I decided to isolate the issue on my own, so I backed up my system with both Time Machine and Carbon Copy Cloner. I then scrubbed the hard drive so nothing was on it, including any partitions, reinstalled Big Sur and with nothing NO OTHER SOFTWARE INSTALLED was able to reproduce the bug in less than five minutes. After that point I restored my system with Time Machine and continued using the system as normal.
However, at that point, I also knew that either I had a hardware problem (or infinitely more likely) a bug in Big Sur that up to this point Apple Support technicians either didn't know about or denied.
Yesterday, (after the call with the Sr. Support Technician who didn't know the correct procedure for running diagnostics on an M1 Mac) I booted my iMac into the diagnostics partition and successfully ran diagnostics, which returned with a code of "ADP000 No Issues Found"; wrote her back and told her about the Apple Diagnostics result.
Today, the same Senior Apple Support technician called me back and told me that their Engineers had, indeed, gotten notifications of the same bug by different Apple M1/Big Sur users and that they are now investigating the issue.
The moral of this story is do NOT take Apple Support technicians word as gospel. If you know you have a problem/OS bug, pursue it, ask for a Senior Technician and have them run share your screen, take screen shots or video record your session, run diagnostics, gather log files, and request they involve Apple engineers. If you don't you could be stuck with a problem that very well could be fixed. However, you may have to press for the resolution.