Everything is different with the M1
I had this same issue after erasing my computer to do a full reinstall of Big Sur
Error was
"An error has occurred preparing the update. Failed to personalize the software update. Please try again.”
I was mis-advised by several lower level tech support to erase both MacintoshHD and Data in Disk Utility and reinstall Big Sur. This does not work. Apple should maybe tell their tech support.
Here is the method to use:
Computer off
Hold power button until the computer begins to search for startup options
Click Options
Now, at the top menu bar, click Utilities and select Terminal
Enter this:
resetpassword
The click enter
Follow instructions
At the top bar, under Recovery Assistant, select Erase Mac
Once that's completed, when you go to reinstall Big Sur, you will only have one place to install it called MacintoshHD and it should work fine