Unlikely, the M1 page [0] says "2 displays" and I'm pretty sure the MBP supports internal display + Touchbar + external display. And even that is based on high-res displays, I think it could support more external displays at FHD [1].

[0]: https://www.cpu-monkey.com/en/cpu-apple_m1-1804

[1]: https://www.youtube.com/watch?v=lqINozYxDK8

I wonder if their new GPU somehow is limited on display support (and they basically have to "add cores" to get more displays).

My current 16" MBP has no problem driving a total of five displays and 16,041,600 pixels - and I'd be hard pressed to go back to just two external displays.

It’ll happily drive significant numbers of pixels although the resources used by Window Server do appear to scale somewhat proportionate to what you hook up:

https://support.apple.com/en-us/HT210754

I’ve found a Pro Display (6K) and two other Dell 4K works fine, additional to the internal display (it’s a MBP 16” and not running in clamshell mode).

MacBook 16”: 3072x1920

Pro Display: 6016x3384

Dell U2718Q: 3840x2160 (x2)

Total Pixels: 42,845,184

Modern hardware is frankly amazing. I remember the 22” Trinitron CRTs of years ago and owning and driving one of those was a feat, now we have multiple displays with PPI such that with average visual acuity everything is so incredibly crisp.

That would be a downgrade from current chip, so it's very unlikely.