If the 512 ssd fails on an out of warranty M1 Macbook Air what is repair cost?

There is no disclosed repair price for such an occurrence. The MacBook Repair page suggests contacting apple Support for a quote in those instances. click here-> Mac Repair - Official Apple Support

The M1 Macs are all still under warranty, so should the SSD fail, the repair should be free at this point in time.

Yes. PCIe 4 NVMe is faster, its also produces much more heat. Though this is still the first generation of these new integrated SSDs with the M1 CPU.

They probably won't do a board level repair for a customer, instead just replacing the entire computer.

They may refurbish the board at the factory some time later. But to expedite things, it likely will be a complete computer replacement on the spot.

cost prohibitive, new logic board including the soldered SSD would be needed

FWIW, all MacBook Airs, Pros, and MacMinis all have had

soldered in SSDs at least since 2018 and required a logic board

replacement to fix.