I use an M1 Air for music production, and it's been great. I think the Air is uniquely suited to do well, since the cpu use peaks up but it's less sustained. The only situation it would be a problem is rending tracks to audio with really long exports.
I can set the audio buffer to 32 samples and it's usable with any plugins. I have a project with around 60 tracks and another with over 100 that I ran problems on an old Air and needed to freeze tracks and run at the highest buffer size. The M1 easily handles it with only 25% cpu and lowest buffer size.
Judging by benchmarks, the M1 Macs are roughly a 16inch MacBook Pro. That's the baseline, which is a good 2 to 3 times better than any Intel 13" MacBook Pro or Air. The full M1 Pro is about twice as good as the M1. It's really an insane amount of power for an entry level computer.
This is a good demonstration of what the M1 Air can do.
He runs an actual project and says it would be impossible on an Intel 13" MacBook Pro. And there was no noticeable difference between the M1 Air and Pro. He's doing mixing, but there was no difference between 8GB or 16GB. I'm curious what the actual RAM limitations are, you would need a lot of huge sample libraries to need more than 16GB I think... but I haven't seen a demonstration of what the limits are.