Servant,
I am well aware of the technical specs on the M1 and have been for some time. I was aware that the specs purported to limit one to two displays, the iMac display and one external.
I researched the matter and discovered that despite that spec it was possible with a Satechi Thunderbolt DisplayLink docking station to run two external monitors. I bought the docking station and did in fact run three displays at once. This would seem to suggest that, at least when running Sonoma the M1 chip was up to the task, despite the specs you reference, of running three display monitors.
You appear knowledgeable; I would appreciate your insight. Why is it that an iMac M1 running the Sonoma OS was capable of generating three displays through a docking station, but the very same computer running the Sequoia OS cannot. I'm not a techie, but it seems logical that something changed and the only thing that changed was the OS. If Sonoma could provide three screens, why can't Sequoia?
Unless Apple wants to for some reason discourage use of docking stations.
Appreciate your time and your expertise.