The problem is that the normal M1 only allows one external DisplayLink screen on macOS (Linux can get more screens out of the same hardware, I believe, as long as the I/O bandwidth doesn't get exceeded).
In the end, the problem is that the first M1 chips simply didn't have the I/O capacity to drive multiple screens normally like the Intel machines before them could. Higher end and more recent chips have added more I/O (two screens for M1 Pro, four to five for M1 Max, five on M1 Ultra)
DisplayLink, a proprietary protocol that sends video over USB, was never a problem. The quality and performance of DisplayLink is far below DisplayPort, though, because the video needs to go through software and an additional layer of compression to fit within the USB data speeds.
If you need more than 1 external display you go with an M1 Pro or M1 Max. They support 2 and 4 screens respectively. Buying an entry level model and expecting it to come with higher end features is a user issue, not a product issue.
Hm one display connection seems to be reserved for the HDMI port if there is one. Considering how much trouble I tend to have with HDMI ports, that means the M1 Pro only supports ... one external display.
Well...no it supports two. Mines litterally sitting on my desk right now plugged into 2 screens and has been for ~4 months. A you issue doesnt make it an issue with the product ;)
Sure but can i do 2 x usb-c to displayport? Every time I plug something via hdmi in my current mac it tells me its a tv. Fortunately being Intel i can use 2x usb-c instead.
In the end, the problem is that the first M1 chips simply didn't have the I/O capacity to drive multiple screens normally like the Intel machines before them could. Higher end and more recent chips have added more I/O (two screens for M1 Pro, four to five for M1 Max, five on M1 Ultra)
DisplayLink, a proprietary protocol that sends video over USB, was never a problem. The quality and performance of DisplayLink is far below DisplayPort, though, because the video needs to go through software and an additional layer of compression to fit within the USB data speeds.
You can see the limitations per model on Apple's website: https://support.apple.com/en-asia/HT202351