MBAir M1: Mixed Battery Warnings + Diagnostics Error PPT012

At 80% capacity and over 1000 cycles, the battery is at the ragged edge of when Apple says it should be replaced, if not over it, which is probably why you're getting that battery error indicator. As to the PPT012 error code, that may indeed indicate a problem with the charging circuitry, though I can't say with certainty. I would suggest taking the Mac to an Apple Store or authorized service center for evaluation and recommendation.

Regards.

Ignore the battery information shown on the lock screen as it may be incorrect. While this may have improved with macOS 14.x Sonoma, I'm not sure it is perfect yet.

My guess is that the 1,000 charge cycles is triggering the diagnostic failure....or perhaps it has actually detected a hardware fault with the battery. Sometimes these battery issues can be intermittent as can the "Service Recommended" battery condition....at least until the issue becomes worse/more pronounced.

Traditionally once the Battery's Maximum Capacity dropped below 80%, it would trigger a "Service Recommended" condition and the diagnostics would alert as well. However, with more recent versions of macOS I'm not seeing this occur until the Maximum Capacity drops much lower and remains at the lower capacity for a while. The Maximum Capacity can fluctuate up & down by 5% or even more when the battery is failing. It also doesn't help the situation when the Maximum Capacity reported by macOS is actually several percentage points higher than the actual Maximum Capacity.

I think Apple has messed up the battery health reporting aspect of macOS a couple years ago. Unfortunately this is becoming more & more common with Apple.

Since your battery is over 1,000 charging cycles it is worn out and with the Maximum Capacity at 80% it is close to needing replaced just for that alone. Combined, I would say it is time to have the battery replaced.