Will The Sims 4 damage or lag my MacBook Air M4 2025?

The Sims 4 will not damage your Mac in any way.

It will either run or it won't. It may run well, it may not. But it won't do any damage.

The Sims 4 system requirements - help.ez.com

I am unsure how to interpret your question.

Will the Sims 4 game itself run smoothly? You should check the Sims4 or EA forums to see what other Sims4 M-series Macs users are saying or complaining about. If purchased through the Apple App Store, then read the most recent reviews (if any).

https://forums.ea.com/category/the-sims-4-en/discussions/the-sims-4-technical-issues-mac-en

If the question is about whether downloading/installing the Sims4 game will affect the function of other apps & functions, then....

• No, if the game is completely closed it will not affect the functioning of other apps.
• Possibly, if the game is open & running in the background it may cause issues with other apps, or the game may encounter issues due to the other apps. Some games don't take well to sharing the computer with other open & running apps while the game is running especially when the game is running Full Screen.

I don't see any mention on that EA site of Apple Silicon processors. So you may need to run The Sims 4 under Rosetta 2 translation. If so, the first time you run the game, there will be an initial delay as Rosetta 2 translates Intel machine code into ARM machine code and the Mac saves a copy of the translation for future use.