Howard Oakley recently dove into the boot process for M1 Macs and how it affects booting from an external hard drive.
Unless the user has already changed its default security settings to allow it to start up from an external disk, you’ll have no joy whatsoever. Although this is secure, it’s also more than inconvenient, as the times that you most need your Mac to start up from an external disk are when it’s in trouble with its internal disk, and that’s likely to prevent you from changing its security settings, leaving your Mac dead.
Check It Out: Examining the Boot Process for M1 Macs