Preferences Error: There was an error in display preferences

Hi all,

Having trouble with the new MBP 16 M1 Max and Dell up2720q monitor. When plugged in via Thunderbolt 3 port and changing display preferences getting the following error:

Preferences Error

There was an error in display preferences

It seems that there is a wider problem affecting the quality of a scaled output overall, specifically, quite poor quality of fonts and washed colors.

The same monitor plugged into the old intel-based MBP 2019 works perfectly well on all scaled resolutions.

Has anyone experienced the same problem?