I had the same problem with my new MacBook Air M1. This started after BigSur update. The place I bought it from would not help, saying since it was opened it was my problem. Apple Care was very suprised & upset when I told them that. Spent 2.5 hours on the phone with Apple Care support trying the following several times: resetting passwords, erasing HD & HD Data, repairing HD & HD data, reinstalling BigSur, deactivating Mac, creating new accounts, and more things that I can’t remember. Nothing worked to fix it. Would not recognize Apple password or Mac passwords during various steps. Tech support decided it needed to be sent in. Hoping it’s covered by warranty!