Yes, a m1 with Monterey is fully supported and a m1 pro has plenty of power for dev work. There are apple silicon native versions of MySql, PostgreSql and the dotnet 6 tools. also on a Mac, you have android and iOS emulators for mobile development.
if you want to use SqlServer, then you can use the Azure Sqlserver (SQL Edge) docker image.
while visual studio code is adequate for asp.net development, if you want to do mobile apps, you may want to also use visual studio for Mac 2022 (in preview), It will help with project templates, code signing, and debugging in the simulators. Its also probably helpful with Blazor apps.
with vs 2022 you can create native macOS and iOS apps using C# and UIKit (requires an Xcode install to edit story boards and UI) instead of using Xamarin forms or Maui.