Technically it may be possible, however, from reading these forums it is not advisable to do this anymore. Beginning with one of the macOS 12.x point release updates, Apple broke this configuration. While it was possible to "fix" things again, another later macOS update or possibly upgrade once broke it. This indicates to me that Apple doesn't care or test this configuration, so only use it if you are willing and able to fix things when it breaks. The fix at the time was not easy to figure out since macOS had renamed the mount points involved and duplicated them. Are you willing & able to deal with possible down time while you try to resolve the issue?
Another possible issue is that Time Machine does not seem to like restoring from a backup with this configuration. I have numerous posts in the past few months where people who had this configuration could not restore their systems from a Time Machine backup using the traditional methods. Are you willing to deal with figuring out how to restore your data if it is ever necessary to perform a clean install of macOS?
From my own personal experiencing supporting thousands of our organization's Macs, I have discovered that macOS does not like deviating too far from standard defaults or surprises in general. I have seen even simpler customizations (ones in the basic macOS System Settings interface...not even considered "Advanced") cause unexpected issues with macOS.
You definitely want to keep at least one admin user account on the internal boot drive so if the configuration does break, you actually have an admin user you can access to attempt to fix things. Keep in mind if the external drive does not go ready quickly enough, it may break the configuration or require you to first log into another user account.
I have seen respected forum contributors suggest just moving your Photos Library (maybe even iTunes library) to the external drive...Apple even provides an official method to do so:
Move your Photos library to save space on your Mac - Apple Support
If your large amounts of data is other types of content, then just store the data on standard external media (either USB3 drive or a network share). You should be able to create a link to the external drive to make it appear seemless.
If you are willing to accept these risks (possibly others), then try it. I highly recommend you look at other options such as a larger internal SSD, or other methods of storing large amounts of data on external media (USB3 or Thunderbolt drives, or network share with a NAS).
