Cloning an APFS Drive

Does my CCC backup have to be bootable for me to restore data from it?

No, in fact we no longer recommend that you attempt to make your backup bootable. Bootability is a convenience that allows you to continue working if your startup disk fails, but it is not required for restoring data from a CCC backup. You can restore individual folders and older versions of files (i.e. from snapshots) using CCC while booted from your production startup disk. CCC backups are also compatible with Migration Assistant, so you can use Migration Assistant to restore all of your data to a clean installation of macOS (e.g. on a replacement disk).

I have made a bootable Monterey drive using Carbon Copy Cloner. You need to pick the legacy feature to make it bootable. That being said the external works fine with Intel Macs but not very well with M1 Macs. (I have both).

You also may need to change your security settings from the recovery mode otherwise an external will not work on M1 Macs. Follow this process:

Change security settings on the startup disk of a Mac with Apple silicon – Apple Support (AU)

and then this:

https://bombich.com/kb/ccc6/cloning-macos-system-volumes-apple-software-restore

With CCC you must erase the destination volume and you must right-click or Control-click on the destination within CCC to select "Legacy" to make the clone bootable. CCC has instructions on their website.

Since the user is replying to themselves - it is difficult to actually know to Whom the replies are intended.

The issues appears to proven out.

Making a 100% Bootable Clone on Monterey 12.3.1 and above is problematic as whatever Third Party Software is used, they ALL are 100% dependent upon the Underlining Apple ASR aspect of the Operating System

Starting in macOS Big Sur, the system now resides on a cryptographically sealed "Signed System Volume"(link is external)

. That volume can only be copied using Apple's proprietary APFS replication utility ("ASR"). Right now, ASR will only copy whole volume groups (System and Data); we can't choose to copy just the System volume

That is Beyond our ability or the Developers ability to change

If the computer has the T2 Chip or is a M1 / M2 Apple Computer, Security Settings needs to be changes from Recovery Mode.

By Default, the computer will not boot from an External Drive - period.

refer to link below and then Test the Bootable Clone Drive again

About Startup Security Utility on a Mac with the Apple T2 Security Chip

Possible workaround

Install Monterey Directly to External Drive.

Thereafter, us your Time Machine Backup Drive during the Setup Assist process to bring all your Applications, and personal Data across.

Notation - if going this route - any additional updates to Monterey ( 12.5 in beta now to Public Release ) will require the same process of a Direct Installation of the update to the External Drive

macOS Monterey Known Issues

I think you may see, even the Developers of Carbon Copy Cloner has suggests abandoning the idea of Bootable Clones as Apple has changes things since about version 12.3.1 and forwards.

That is not to say it is impossible but is more of a Best Effort when performing a Legacy Clone with the CCC Application.

As has already been very correctly mentioned by @ HWTech - the user needs to Erase the Destination Drive and then Right Click on that specific Drive from within Carbon Copy Cloner Application.

That should offer a Sub-Menu to the Legacy Clone can and does work.

I know because have been doing this on two M1 Apple Computer both running Monterey 12.4

There’s one final thing to point out. Do you have more than one external storage device attached? If so, unplug all external storage devices except the bootable clone and try again.

I have an M1 iMac and just this week I’ve successfully made a bootable USB SSD (OWC make) using the free version of SuperDuper and after changing the security setting it boots without issues.

I make daily bootable clones of my APFS startup drive using SuperDuper. And yes, I do test them on a regular basis. So whatever is going with your Mac is not normal or expected behavior.