Didn't have a chance to try Etracheck yet but today pretty much confirmed my Mac is beyond compromised.
Unfortunately I don't even have the ability to enable FileVault which goes to MrHoffman's point:
"Disk encryption is automatically enabled in all T2 and Apple silicon Macs, and you will have undoubtedly had FileVault enabled to use a better password for that encryption"
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The timing and pattern is what's interesting to see as I logged in today for the first time in a while on a fresh install for a business meeting regarding resetting access level credentials and logins for several websites and domains and despite having stolen device protection enabled, a recovery key and advanced data protection, I couldn't encrypt nor enable FileVault.
What's even more interesting is immediately after my meeting ended I went to the Apple support site and the chat member asked for my Mac's serial and then said he couldn't book me a Genius Bar appointment and needed to first speak to his supervisor and assigned me a case #.
This happened about a week ago as well so I knew it was a bit off as the real Apple support team is always far more helpful and professional.
After logging out I did a clean install and once again it loaded do not disturb settings and a bunch of extensions.
Seeing how this continues to persist strictly whenever I use my Mac, I decided to instead use the official iPhone support app afterwards and booked myself an appointment this week to have the Apple Genius Bar take a look at it.
Hopefully they can replace the hard drive as it seems you are all correct that it is far beyond any sort of remediation at this point from an internal hard drive point of view.
Thank you all again for your input and feedback, it's been of great assistance.