Just want to surface this to see if anyone has it fixed or so anyone at Apple can give it a look. I remember finding a fix involving editing a cursor file a while back, but it must not work as I've been seeing it again (and can't find that fix searching anymore).
There's a lot of reports:
https://www.reddit.com/r/macbookair/comments/pome1y/mba_m1_c...
https://www.reddit.com/r/MacOS/comments/nlbf6w/weird_cursor_...
https://www.reddit.com/r/mac/comments/qtfc2e/lagging_jittery...
https://www.reddit.com/r/mac/comments/qj77mq/cursor_lag_cont...
https://discussions.apple.com/thread/252777347
https://discussions.apple.com/thread/253079227
https://discussions.apple.com/thread/252732117
There's this one video with a fix, but I already have shake to locate off and it happens without using any bluetooth mouse: