true tone not working after screen replacement macbook air m1

Hi iquikapp,

Thanks for reaching out to Apple Support Communities. Let's check your True Tone settings first:

Use True Tone on your Mac - Apple Support

True Tone technology makes the images on your Retina display and Touch Bar appear more natural.

The True Tone technology in Mac computers, Studio Display, and Apple Pro Display XDR uses advanced multichannel sensors to adjust the color and intensity of your display and Touch Bar to match the ambient light so that images appear more natural.

1. Choose Apple menu  > System Preferences, then click Displays. If you have multiple displays connected, click Display Settings, then select your display.

2. Use the True Tone checkbox to turn this feature on or off. It appears only on displays that support True Tone.

You mentioned replacing the display yourself, were you following this guide?

Self Service Repair - Apple support

If so, you may need to follow Step 3.

3. Repair your device

After receiving the genuine Apple parts, follow the technical instructions in the repair manual for your iPhone or Mac model to perform the repair.

A System Configuration step may be required at the end of your repair. System Configuration is a postrepair software tool that completes the repair for genuine Apple parts. The repair manual will indicate if System Configuration is required. You will need to contact the Self Service Repair Store support team by chat or phone to initiate System Configuration.

Also, Step 4 shows that you can get the old screen recycled.

Cheers.