This does not make sense, because the
Studio Display XDR tech specs say that certain processors can only drive the display at 60hz. "Mac models with M1, M1 Pro, M1 Max, M1 Ultra, M2, and M3 support Studio Display XDR at up to 60Hz. All other Studio Display XDR features are supported." The response by Apple Support seems to contradict the tech specs page.
So you can't run two XDRs displays on the M5 (base). It could be caused by dual-pipe display operation. If true, each XDR requires two display inputs, and the M5 only supports two external displays.
People have reported problems daisy chaining two Studio Display XDRs, even at 60hz.
Multiple people in this thread have issues with the M4 Pro but not M4 Max. The M4 Max supports four displays at 6k 60hz. The M4 Pro supports three 6k 60hz. The M5 (base) supports two 6k 60hz. And the M1 (base) supports only one.
Source: external display support M1-M5 base
People have reported instability with single XDRs, not just daisy chaining. It seems like 26.4 did not fix the issue. I experienced my first crash after I installed 26.4. When it happened half of the screen glitched out.