Not the most productive comment, but I always wait 6-12 month before doing a major upgrade - I let other people find issues like this. Or just wait a month if you're in a hurry for some reason.
>latest version of Mac OS broke docker
That's wrong, Docker will run fine on M1/Big Sur after an ARM release and probably some patching. Not too different what you'd expect on any major OS release.
How do you know it will?
Apple showed it on stage at WWDC, along with Debian ARM running inside a VM. It's coming, if for no other reason than developers inside Apple need it when writing infrastructure software. (Honestly, I'm surprised that Docker didn't get the same pre-release hardware Parallels did)
Because M1 has virtualization and emulation support, unlike the A12Z (not M1) ARM processor on which the docker issue was opened. This is explained here: https://news.ycombinator.com/item?id=25073010
And Docker has the motivation and means to patch and build the M1 Arm version.
You can take it directly from the Docker people:
> Thanks. We're working closely on this with Apple. This is expected right now (and indeed there's nothing we can do about it yet) as the new chips don't have virtualisation support yet.
https://github.com/docker/for-mac/issues/4733
Notice the lack of panic or any mention of "it'll never be done", even implied.
For example, the latest version of Mac OS broke docker - literally today we discovered this.