Run the following Terminal command so we can retrieve the SMART health information from the internal SSD and post the results here (best to copy & paste this since every character is critical):
diskutil info -plist disk0 | plutil -extract "SMARTDeviceSpecificKeysMayVaryNotGuaranteed" json -r - -o - | grep -v '_1"'
ANS2 Kernel Panics are related to SSD issues. Usually it will be due to the internal SSD failing, but you may also see these types of Kernel Panics associated with Thunderbolt connected SSDs. I am very curious about the results of this command in regards to these Kernel Panics.
The Kernel Panic is showing "uncorrectable" errors which means the SSD has a hardware problem. With the Intel Macs I have successfully "fixed" SSD issues like this by resetting the SSD to defaults by using the SSD's built-in hardware secure erase feature. With the Apple Silicon Macs, there is no way to do this the same way.
Perhaps a DFU Firmware Restore will reset the built-in SSD to factory defaults, or it may just perform a simple erase which likely won't help fix anything. This is the only option you have to try to attempt to "fix" the internal SSD, otherwise the laptop will need to be repaired by having the Logic Board replaced because the SSD is integrated onto the Logic Board.
Unfortunately a DFU Firmware Restore requires access to another Mac currently running macOS 15.7+ Sequoia, macOS 26.x Tahoe, or macOS 27 Golden Gate (the Apple Configurator app version 2.19 is required if the host Mac is running Sequoia). This process will destroy all data on the internal SSD and it will push a clean copy of macOS onto the internal SSD. Afterwards you can restore from your Time Machine backup during the initial setup of the new OS.
If you do this, then run the Terminal command again to see if the "Media Errors" and "NUM_ERROR_INFO_LOG_ENTRIES_0" values have changed (most likely they should remain the same). I would monitor these values occasionally even if there are no more Kernel Panics just to make sure these values are not increasing. If the DFU Firmware Restore actually reset the internal SSD instead of just performing a simple erase, then hopefully those errors will stop accumulating.
I'm very glad to see you do have backups.