This is likely to be a hardware issue connected with low level of HDMI sygnal, but fortunately solvable, though still irritable. I like to think I may have figured that out and I hope that this will help you lot. one day, I was watching Netflix when I was called off on an errand, after which I found my Mac Mini (M1) asleep. Normally, it would on occasion unlock with my iWatch, but then again sometimes I would get the haptic reaction on my watch and nothing would happen, and I had to hard-reboot it, which obviously I hate, because of data corruption issues that may ensue. That one time, however, I discovered that the Mini did wake up, because I could start and pause Netflix. While this may not be an issue on Apple monitors, apparently the signal was too week for my 27" widescreen Samsung display. It was getting some signal, but apparently not enough to wake it, and it kept swotching between HDMI and analogue (VGA). The reason why I think I think it was generating HDMI signal as opposed to no signal is that when there indeed is no signal, the display says check cable, no signal message, which it wouldn't on all previous instances.
NOW FOR THE SOLUTION: I disconnected my iWatch charger, that was permanently hooked to the Mini for convenience. This seems to have worked like a charm (fingers crossed), and I can only guess that the charger was draining just too much power for the HDMI signal to conform to the level needed to wake my display.