Spatial audio not available on MacBook(M1)(I'm using the Gen 3 airpods)

OK.....I believe (but could be wrong) you need an M1 MacBook Pro Silicone 2021. Also, if memory serves the source of musiv/video needs to support Dolby Atmos. Apple Music supports Dolby Atmos, but YouTube/Spotify may not.

What is the source of music you are trying to use Spatial Audio from?

I had the same issue, in Apple Music - toggling on Dolby Atmos allowed spatial audio