Have been working with AppleCare/Apple Engineers on this problem - taking captures and uploading to their engineering team and they are making progress and doing a good job to understand the issue. Discovered some interesting results here that I thought might be worth mentioning for everyone's benefit.
Through multiple test scenarios, we discovered that some common applications such as VPN / Security software may install extensions which appear under System Preferences -> Network. On the MBP 16" M1Max, when using the Wireless subsystem which is a discrete chipset (not part of SoC M1Max), everything works under load for extended periods of time without issue. When these extensions need to operate with Wired Ethernet adapter and the macOS Thunderbolt4/USBC subsystem/drivers there have been some issues identified and they are investigating the logs/captures.
If the extensions are not utilized, extensive tests under load show the Thunderbolt4/USBC subsystem/drivers and the Wired adapters work properly and have no issue. This is helping to identify the root cause of the potential problem and the engineering folks are investigating to see why the extensions working fine with Wireless but seem to encounter periodic reliability issues when interfacing with macOS subsystems for Thunderbolt4/USBC. Starting to get closer to an answer which should help get the problems resolved and into the next release for everyone.
