TL;DR: Apple fixed my display for free and although they hosed my macOS in the process, I am back up and running thanks to redundant backups and a second MBP on hand.
Despite my best effort to protect the screen on the MBP I purchased in Oct, 2021, it got the inevitable permanent marks from the keyboard and trackpad. I dealt with it for a long time, but it eventually got so bad it actually interfered with my ability to see what was being displayed in certain lighting.
I made a Genius Bar appointment, showed them the damage, and they quickly offered to replace the screen for free under Apple Care. He said it would be ready for pick up in three days, but I asked him to ship. I followed the repair updates online, and although there was no activity for a few days, on the evening of the third day I was notified the repair was complete and I received it late on the fourth day.
It arrived in secure, Apple-like packing, along with a service summary showing the display and lid sensor had been replaced. Opened it up and it looked great!
If you’ve ever done a hardware repair with Apple (not my first rodeo) you know they repeatedly tell you back up your data, and have you sign an agreement acknowledging potential data loss. It’s never been an issue for me, but when I booted up after this display replacement, I got the “Select Drive” screen. Uh oh.
So many problems after this trying to restore, recover, reinstall. Calls to support. First I had to unlock the disk, then it said macOS had to be reinstalled. FirstAid said all good. Then when I tried to reinstall macOS it said macOS couldn’t be downgraded. …
EVENTUALLY, I was able to install a fresh OS from a bootable disc I made on another Mac and then do a full restore from Time Machine using a USB drive (Thankfully I run TM on my NAS at home and also to the USB at my office). The restore on the M1 machine with 1.25 TB of data only took 4-6 hours to complete. I was shocked it worked!
From there, after 1,273 permissions, logins, downloads, and restarts, everything seems to be working so far, except for one thing I missed in all my backups: My Windows 11 VM, which is excluded from backblaze and time machine. I had forgotten to manually back it up since 2021, so I am currently running updates on that Developer Preview. Fortunately, all the data is secure, so it’s just a matter of getting that Windows OS squared away so hopefully all its settings are retained.
FYI: I used a very thin microfiber cloth between the keyboard and display since day one on the MBP, but the screen still picked up marks within a few months. The Apple genius said the best thing to use is the “thin parchment paper kind of thing that ships with the new MacBook. Or you can try actual parchment paper.”
I will now open the floor for questions 
