AshX Yes I have tried downgrading without any real results on panel or external BENQ monitor. I did so many times now, and nothing helped. @DisplaysShouldNotBeTVs suggested its the firmware that is the issue, and it is hard to downgrade of not imposible. I did not explore this territory. All I know, laptop was way more usable than it is now. It was not perfect, but I did not have this almost like micro seuzure activity in the frontal lobe after looking into a screen. And I definitely tried after very long break and can say even lenovo with PWM panel is much better.
In terms how do I know external monitor flickers, well I did not test it scientifically, but I know really well the feeling in the eyes from pwm like flicker. It is as if razor blade goes through my eyes, which means nerves get triggered. But note, external monitor is better then panel, and it also requires tinkering, e.g. setting up on sRGB on macbook, and on Benq, so that it does not use full spectrum of colors.
And just want to reiterate, I tried really hard to explore every possible combination of settings through all apps available. There was not solution to the problem. I could only work for 1, 2 hours max, until I would not be able to focus due to pain. And intel UHD 620 worked way better, even when this GPU is known for aggresive dithering. With windows setup I was able again look at a screen as a peace of paper, rather than having this massive torture with M2 Air. I still would get tiredness after full day, but it felt now as normal eye fatique, nothing razor sharp feel like.
At this point, I am waiting for Zenscreen MB16ACV, really have my fingers cross on this one. Maybe this will be a solution which would allow me to use both machines for a full day and at the same time solve posture problem as I ordered mini tripod too.