I have been pleasantly surprised how well my M1 MacBook Air 8GB/256GB has performed with the new Photogrammetry tools in Monterey. I've hit memory pressure and swap lock ups as I ran out of disk space for other unrelated tasks, so personally I would give yourself some extra flexibility with 16GB, but so far 8GB has been just fine with 150-250 photos captured using the Photo Capture sample app on my 12 Pro Max.
Have fun! I am loving it.
HeadOn
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PS Apple, how about letting us do the same magic on the M1 iPad Pros? It's killing me that I have all that power and I want to be doing the capture and processing all on one device. :)
I am encountering a similar problem with the Unlock not working but in my case I am booted into Recovery Mode and Using Restore from Time Machine, it shows my internal Drive (Macintosh HD) and I am trying to restore from the last local snapshot, but like you when I select my Disk and hit Unlock, nothing happens.