The M1 MacBook Pro only supports one external monitor.
If you are using DisplayLink technology, you can attach more. DisplayLink requires not only a third-party software driver on the computer – but a DisplayLink implementation (chips and software) in the hub/dock or monitor that's going to implement the second video port or display. The driver creates a virtual software display, and then sends updates to that display to the matching hub or monitor over a data connection. So it's not as "first class" as direct monitor support in the M1's GPU, but it might work out for many productivity applications.
Looking at Dell's site, I see no indication that the WD22TB4 supports DisplayLink technology. I think it is counting on the fact that a Thunderbolt connection can carry two DisplayPort sessions. (Aside: This is something that the LG 5K and Apple 5K/6K displays rely on. They use both sessions, each carrying the signal for half of the display.)
Unfortunately, while the M1 chip is sophisticated enough to support a single 5K or 6K monitor, it does not appear to be sophisticated enough to support two independent monitors using either DisplayPort chaining or the two Thunderbolt / DisplayPort sessions. That's reflected in Apple's specifications, which say that the 13" M1 MBP supports a single external monitor, and that it has Thunderbolt 3. (Thunderbolt 4 certification would have required the machine to be able to drive two external displays.)
https://www.dell.com/en-us/shop/dell-thunderbolt-dock-wd22tb4/apd/210-bdqh/pc-accessories#techspecs_section
There may be other hubs that you can attach to your Mac that would support DisplayLink technology and would allow you to have a second monitor (using compressed video sent over USB-C). The Synaptics site lists some of them.
https://www.synaptics.com/products/displaylink-graphics
Just be aware that DisplayLink is not the same thing as DisplayPort. DisplayPort is a standard for the direct connection of a display to a device (computer, tablet, etc.), whereas DIsplayLink is a clever workaround for when your hardware doesn't support as many direct connections as you'd like.
