M1 Max MBP 16" + Apple Thunderbolt Display = USB Accessories Disabled

Hi, All! First-time Mac owner here!

I have a 16" M1 Max MBP and an old Apple Thunderbolt Display, connected via an Apple brand Thunderbolt 3 to Thunderbolt 2 adapter. As soon as I plug in the display or wake up the MBP with the display connected, I get the "USB Accessories Disabled" warning, as though something's drawing too much power. This is annoying as I hope to use this setup as my main computer, and that notification comes up every time.

The Thunderbolt Display itself works, as do its built-in Ethernet adapter, camera, mic, and speakers -- but its USB ports not, even with no devices plugged into them.

Oddly, when the Thunderbolt Display is connected to AC power but not the MBP, its USB ports can be used to charge things.

Tried plugging in the display through a powered Thunderbolt hub (OWC). Also tried multiple ports on the MBP, and ensured that nothing else was plugged into either the MBP or the hub. Same result.

To be clear, the main thing I care about is that notification. Don't need the USB ports on the Thunderbolt Display. I just don't want to have to close that notification every time I use the MBP with the display.

Any thoughts? What else can I do to diagnose/fix this? TIA!