Have you reported the issue to Apple?
I have now reported the issue to Apple. I have essentially laid out that the M1 Macbook Pro/Air doesn't offer sufficient scaled resolution options with this configuration.
So far they have been exceedingly helpful.
They asked me to do the following:
Open Finder, Select > Go To Folder from the Go menu.
Browse to the following folders and perform the suggested action:
Delete com.apple.windowserver.displays from ~/Library/Preferences/
Delete files relating to WindowsServer from ~/Library/Preferences/ByHost/
Once sent to Trash, Reboot your machine.
This made no difference for me, though does seem to have reduced some other strange behaviour I was having with display flickering and wake issues.
The prior methods of modifying the *.plist files and using Overrides is no longer effective.
From my research so far, I am approaching the conclusion that MacOS is configured to only allow scaled resolutions that run up to 6016 pixels wide as this is the exact number of pixels on the Apple XDR 6K display. I imagine they have thus essentially configured the OS to calculate the available scaled resolutions based on the native resolution of the display and the resolutions that can exist below that constraint.
If I am correct, we will be unable to have more usable resolutions until either:
1. Someone figures out a new way to override
2. They update BigSur to have better support for 3rd party monitors.
I'm currently waiting to hear back from them with an Engineer. I will report back here once I hear something.
Fingers crossed one of those two happens sooner rather than later. It gets tiring being unable to use your equipment in the way you want to.