Apple Music equalizer not responding on M1 iMac

If you do have the equalizer on as Dialabrain mentioned and it's still not working try the following: boot into Safe Mode according to How to use safe mode on your Mac and test to see if the problem persists. Reboot normally and test again.

NOTE 1: Safe Mode boot can take up to 3 - 5 minutes as it's doing the following; 

• Verifies your startup disk and attempts to repair directory issues, if needed

• Loads only required kernel extensions (prevents 3rd party kernel/extensions from loading)

• Prevents Startup Items and Login Items from opening automatically

• Disables user-installed fonts 

• Deletes font caches, kernel cache, and other system cache files

NOTE 2: if you have a wireless keyboard with rechargeable batteries connect it with its charging cable before booting into Safe Mode. This makes it act as a wired keyboard as will insure a successful boot into Safe Mode.

Also have you installed and run any "cleaning", "optimizing", "speed-up", anti-virus or VPN apps on your Mac?

Are you sure it's enabled?

It takes a few seconds to react, but my EQ works as expected.

You're welcome.