Yes; and from what I've seen in Apple's support documentation, you can install linux on the new M1 machines.
I think the broader point is that the support isn't very good. Its not specifically disallowed by Apple or Microsoft, but the manufacturers, tertiary driver providers, and community just haven't put a lot of time into making it great. I expect the situation will improve, but its unlikely we'll see any support from Apple or Microsoft, which absolutely should be a concern when picking these devices for Linux.
It certainly runs WSL2 quite nicely, so it's not too much of a leap to have a usable system without that hypervisor layer. I don't know what hardware features it would miss out on though running natively.
I think the broader point is that the support isn't very good. Its not specifically disallowed by Apple or Microsoft, but the manufacturers, tertiary driver providers, and community just haven't put a lot of time into making it great. I expect the situation will improve, but its unlikely we'll see any support from Apple or Microsoft, which absolutely should be a concern when picking these devices for Linux.