Bootable installer won't recognize on 2020 M1 Macbook air

I can confirm your experience where the bootable flash installer is not offered after holding the power button on an M1 Mac Startup Options screen. It seems only external Thunderbolt drives formatted with APFS are bootable. USB flash drives are not bootable and you cannot put APFS on an installer volume.

The only way to downgrade an M1 Mac is to use a second Mac running at least a later version of macOS Catalina and install the Apple Configurator 2 App from the Mac App Store. Then you'll need a USB-C data cable, preferably a Thunderbolt data cable. A MacBook USB-C charger cable may not work as they may not contain all the wires for communications but only the ones required for charging.

Here's the article that discusses how to revive / restore an Apple Silicon Mac using Apple Configurator 2 on a second Mac. Apple Configurator 2 will download macOS Big Sur and install it on the internal SSD of the M1 Mac.

Revive or restore a Mac with Apple silicon using Apple Configurator - Apple Support

Jdowaosd wrote:

2020 M1 Macbook air

1. I updated my mac to the latest version of Monterey and decided that I wanted to revert back to Big Sur after some compatibility issues.

I followed guide videos and websites and I was able to create a bootable installer of Big Sur on a USB stick. The issue came up when I tried booting the mac from the drive. Even though the USB is recognized and shows up as a drive, the drive wouldn't show up on the recovery screen as a bootable installer.

After further research, I learned that macs with the T2 security chip needed extra permission to boot from external media. Since my MacBook's model is listed as a T2 device, I went to look for the setting to change it but it didn't show up as an option in Startup Security Utility.

I repeated the process with another USB stick and once again failed. I wanted to know if I'm doing something wrong making or using the bootable installer or if it's just a USB compatibility issue.

Steps I took to make the installer:

Install Big Sur in applications

2. Disk Utility to delete and reformat USB to Mac OS Extended (Journaled)

3. Run the command provided by apple to format the USB into a bootable installer

4. After the process finishes I entered recovery mode by continuously holding down the power button

5. Installer doesn't show up as an option (only macintosh and option are availible)

I tried this for a while with multiple attempt an dfailed every time. I was about to give up but I wanted to make one last attempt so any help would be appreciated (I also tried making a Monterey installer to test compatibility and it also didn't work).

The M1 does not have the T2 chip.

M1 Mac—

see about the option gear...(?)

If your Mac starts up to Options with a gear icon - Apple Support

if no insight or resolve, ref:

https://support.apple.com/guide/apple-configurator-mac/revive-or-restore-a-mac-with-apple-silicon-apdd5f3c75ad/mac