Oh i did trash my installation. I somehow didn’t have permissions to reinstall from internet recovery. I had to plus another Mac and use Configurator to restore it.
Try erasing all the existing volumes and create a new one before starting the installation next time. That sounds like the message you would get if you are trying to install onto the recovery partition.
EDIT: According to other posts there are in fact some volumes on M1 Macs where if deleted, you will need to do a DFU mode recovery. So perhaps don't actually delete all existing volumes on an M1
Yes, admittedly there do seem to be some recovery concerns on M1 that don't exist on previous platforms.
However I still don't think DFU mode was necessary in your case. If it were necessary, then you would not be able to boot the system at all with the normal method.
Trashing just your OS partition should not require DFU mode. Although yes, it seems like trashing the new boot data partitions might.