I’m not sure if it’s a typical use case to run 2 displays on an Air, but that is a way more obvious set of affairs on a Mac mini, especially for a developer porting/testing software for the new architecture. You can run 2 displays on the Mac mini…but not the same way you used to.
https://thesweetsetup.com/running-multiple-monitors-on-an-m1...
(That is actually a clearer guide than Apple’s support docs.)