I am using Windows 11 ARM (final version, not insider) on M1 with Big Sur and performance is acceptable. I noticed that I have to restart sometimes because it becomes somewhat sluggish / unresponsive, but I am not sure what the cause of this is. It's not a big deal. I am still using 2 CPUs and it's going ok. I think the cause for the issues might be for me that I am using Firefox for Mac on MacOS with loads of tabs which competes for the RAM with windows. I do recommend Parallels 17 latest version, with Windows 11 ARM.
Generally speaking I would suggest to get a MacBook Pro with at least 32 GB RAM and M1 processor. If the new macbook airs 2022 have more than 16 gb, I would get those with more than 16 and M2. I would also generally recommend using Windows ARM on Apple Silicon /M1/M2. The reason for this is that it is easily transferable (always backup the full PVM file to external media, regularly, and export the TPM key to external too. I am using a Samsung T5 for that, plus a SanDisk USB stick to do incremental backups with macrium reflect (the latter non-bootable, just for data safety). If it is Monterey that is causing the issue, then I guess getting an M1 MBA is the best, that is using Big Sur.
With the VM file, you can easily migrate to another macbook anytime which is a big plus. And migrating MacBook is easy with CCC.
In order to find out if there is an issues with Monterey vs Big Sur on M1, somebody would have to confirm that after updating to Monterey, things get worse and it's not a placebo.
My generaly approach to MacOS updates is that I keep the previous version (in the current case Big Sur) until it is not longer supported, or until the successor (Monterey) is not longer the latest OS, i.e. I would stay behing around one year. That way you always have a stable system that is also secure. Make sure you check for updates of Big Sur regularly (security updates), they are still being delivered and you need to check for them manually (sadly). You need to click the blue font to get to the option to update Big Sur instead of upgrading to Monterey, in MacOS settings.