This is a video from Linus Tech Tips that demonstrates that no matter how much you cool it, they've physically prevented the chip from taking advantage of it.
And if it could be fixed with software, they would have worked out how, they're into that kinda tweaking.
These new M1 laptops are the first laptops that have complete thermal solutions designed by a single company.
As an example, there is the potential to design a computer with no throttling at all if you are able to control the entire thermal design.
This is not true. A laptop needs to work in a cold room, in a hot room, when its radiator is dusty, etc. If your CPU is not willing to throttle itself then a company with Apple's scale will have machines overheating and dying left and right.
For a computer to never _need_ to throttle, either (1)the cooling system has to be good enough to keep up with the max TDP of the CPU, or (2) you "pre-throttle" your CPU by never delivering it more power than the cooling system could handle. Apple refuses to accept solution 1, so they went with solution 2. If you watch the video I posted, it shows that even when there is adequate cooling, the new macbooks will not deliver more power to the CPU. In effect, the CPU is always throttled below its limit.
I expect it would work the other way, too. Improve the cooling and performance under load would improve.