I think you can turn off dithering with SwitchResX. You can choose 8bit instead of 10bit at the display/resolution settings in the menubar. I believe that should disable dithering (of course limiting the color range slightly in theory). You can try this and see if that makes any change…
You need to download SwitchResX trial, then go to mac settings-> switchresx panel -> install switchres daemon and launch it. After that you’ll have new menubar item with all the display resolution/frequencies. On the very bottom of that menu there is a switch between billions/millions of colors. Switch it to millions. This should force the display to 8bit with no dithering.
You can check this in about this mac-> system report-> graphics/displays->select gpu which is in use. The monitor should show 24-Bit Colour (ARGB8888) instead of 32bit.
Go to spotify web player and select any playlist. The background there should have banding in the 24-Bit mode, so I guess this means there is no dithering being used!
Not sure if this works with M1 macs, as I have only intel one. Maybe someone else could check that?