MacBook Air 2024 performance issues, colored circle

I have a MacBook Air 2024. Have had Tahoe for months, have updated to 26.6. Over a month ago I started seeing the colored circle, sometimes cursor would disappear. After 5-10 seconds, it would be ok. Once in awhile it would close a website/app. Sometimes sites are slow to open. I've spent hours on the phone with Apple. It's not a hardware or software problem. I've reinstalled the HD and Tahoe. I'm told the next step is to clean the computer, start fresh. I don't know if this means going back to factory settings. Nothing has happened to my computer that would cause malfunctioning. Nothing spilled, nothing dropped. I'm beyond frustrated. I don't want to go back to factory settings! Thanks for any suggestions.