I think the article is talking about when the internal drive is physically damaged/not working, and not just simple USB booting. USB booting is definitely supported on M1 Macs since I did it last week, but I don't have a machine with an actually broken SSD to test with.

It can be observed that even T2 systems will fail to power up the Intel CPU system if the BridgeOS cannot be read properly. The system will only power up the T2 until it is reflashed through Apple Configurator.