Someone posted on another thread that M1 isnt currently supported because of the architecture difference, but it is being developed.
Post #5 of that tread.
As he states, you can get and follow more info about it here: Home · arduino/arduino-create-agent Wiki · GitHub
They have a beta, but I havent tried it myself yet since I just found it. Having the same issue with my Mac M1. I even tried using my old windows pc and loaded the ArduinoOTA sketch on it and got my ESP32 working and online. The mac IDE (running 2.0....nightly build) can see it but constantly drops the connection to just keeps cycling between reconnecting and going to the debug wlan