And those would be...? Keep in mind absolutely everything in life has downsides, so listing only minor things is for all intents and purposes, worthless.

I would absolutely run a cloud Linux VM on M1 compared to any other hardware. Apple can create a PaaS that can rival AWS

they could ... but doing so would likely cost far too many billions even for Apple. Maybe they could justify it by saying instead of paying AWS and GCP and Azure for services they could just do it all in house on Apple hardware -- and boy howdy that'd be really cool -- I don't think they REALLY think that is a useful use of their time and resources and would rather instead focus on devices and services.

Have you checked AWS' Graviton?

Someone working on the re effort mentioned how Apple runs their own testing on those machines on Linux while macos support is being developed. I don't know where they got the information from. (It was posted on Twitter, but can't dig out the link now)

We know this because people right here are saying they find the Apple hardware more attractive now that it runs Linux.

Maybe Linux on M1 helps Linux at the expense of macOS.