Macbook M3 14” Constantly Freezing

You have some problems with your external 2 TB RealTek drive.

Its drive type either has always been or has reverted to ExFat. That is not something you should be using a for a drive this large, unless you carry it daily to a Windows system, and are using it as an interchange medium.

if you can move any precious data to another dive, you should ERASE that drive.

"Best Practice" is to erase the entire Physical device when new, using only MacOS Disk Utility, and create the fundamental data structures needed for consistent, reliable use by MacOS.

In disk Utility, be sure to "show all devices" which will allow you to ERASE the entire Physical Device by its immutable manufacturer-given device-name, not just user created Volume-name such as ‘Macintosh HD'

But even after that, you still have several festering issues.

You should look at this incident as a near-death experience. what if that drive, or any drive, were completely lost?

You need to be making regular backup copies of your files onto a local disk-based drive. If you do not have a recent local, disk-based backup, your computer is like a ticking Time bomb. You are only one disk failure, one crazy software, or one "oops" away from losing EVERYTHING! Drives do not last forever. It is not a question of IF it will fail, only WHEN it will fail. In addition, you never know when crazy software or Pilot Error throws away far more than you intended.

If you are using another direct-to-disk backup method that you prefer, and you currently have a recent disk-based backup, that is great. If not, you should consider using Built-in Time Machine. Take steps to acquire an external drive as soon as possible. If you buy one, a drive 2 to 3 times or larger than your boot drive is preferable for long term trouble-free operation. Do not pay extra for a drive that is fast.  (You can get by for a while with a "found" smaller drive if necessary, but it will eventually become annoying).

Attach your external drive and use

System preferences > Time machine ...

... to turn on Time Machine and specify what drive to store your Backups on.  It may ask to initialize the new drive, and that is as expected. APFS format is default format if running MacOS 11 Big Sur or later.

Time machine works quietly and automatically in the background, without interrupting your regular work, and only saves the incremental changes (after the first full backup). Time machine backs up every connected drive that is in a Mac compatible format. it can not back up Windows format drives.

Time Machine's "claim to fame" is that it is the backup that gets done. It does not ruin performance of the rest of the computer while doing its backup operations. You do not have to set aside a "Special Time" when you only do backups. When you need it, your Time machine Backup is much more likely to be there.

How to use Time Machine to Backup or Restore your Mac:

Back up your Mac with Time Machine - Apple Support

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Consider downloading and running this little "discovery" utility, Etrecheck. It changes NOTHING. Etrecheck was developed by senior contributor here, and uses system calls to collect often-needed information.

it contains little tests for speeds of devices, CPU utilization, memory usage, energy usage and a digest of recent problems, in one easy to use package. it does not even need to be Installed. Because less can be learned when your Mac is running great, best time to run is when your problems are actually occurring, if possible.

if you follow the directions faithfully, its report (pre-laundered of all personally-identifiable information) can be "Shared" to the system ClipBoard, then Pasted into an ‘Additional Text’ window in a reply on the forums.

How to use Etrecheck Pro for free

http://etrecheck.com

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By far the easiest way to cause poor performance, instability, overheating and crashing is to install ANY third-party speeder-uppers, Cleaners, Optimizers, or Virus scanners, Bit Torrent, or a VPN that you installed yourself. The main reason is that they are relentless in scanning your files, non-stop, looking for virus-like patterns in Everything, or looking for files that have changed. When completed, they do it all again.

¿Are you running anything from any of those categories?

Please post the report. It will not reveal any secure or personal information but but may contain subtle clues that are apparent to those of us like Grant who have reviewed thousands of reports, but not to a new Etrecheck user.

One of the best features of the forums is that you get many eyes looking at your problem.

There are lots of instances where one senior contributor sees only minor issues, and another posts, "did you see this other disaster?"

You have not enabled TRIM on that third-party SSD drive. This means there is no notification of deleted data blocks sent to the drive controller when blocks are deleted, and the drive slowly fills up with deleted data and slows to a crawl. REALLY slow. Impossibly slow. 'Makes you think the drive DIED' slow.

The solution is to run this Terminal command to enable TRIM for all Third-party SSD drives, which does an automatic restart on completion.

sudo trimforce enable

it will ask for your password, which will NOT be echoed, and read you the Riot Act and ask for authorization before proceeding.

https://www.lifewire.com/enable-trim-for-ssd-in-os-x-yosemite-2260789

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after factory reset, did you restore everything from your backup?

did you restore your third-party anti-virus and VPN from your backup?

Just run it whenever you can and post the report.