We just updated our testing M1 Macbooks to Big Sur 11.1 to see if the issue with reinstalling the OS from Recovery boot is fixed (it does appear so). However, we are experiencing an error when it comes to account creation in the initial setup process. The error is:
Computer account creation failed
Your computer account could not be created with the name and password specified. Please try again.
Trying to create the account again errors that the name is unavailable, so you have to choose a different account name. It will also fail on the second account. Powering the device off and back on will bring it to the login screen where it will list the accounts that you tried to create, but the passwords will not work.
It exhibits the same behavior with or without DEP provisioning. It does not exhibit the issue when restored via Apple Configurator 2.

