Since M1 products are selling very well, they likely have reallocated fab capacity they had planned for the successor to the M1 back to making the M1.
A higher performance M1 would have a bigger die size. It would have a lower yield and get fewer dies per wafer. The same capacity would sell fewer products.
Apple probably earns more profits by simply selling more M1s, unless they can reserve substantially more fab capacity.
Got any proof or something? This is a bold claim to make.
For example https://www.cpu-monkey.com/en/cpu-apple_m1x-1898 talks about a 12 Core CPU but with only 16GB RAM.
Do you have a source for there being any fab capacity shortage for Apple (or anyone, for that matter) at 5nm? Older nodes are a different story because that's still where most of TSMC's customers are doing their high-volume production.
For chips with massive cache, that isn’t super cost effective (I suspect as a cost saving measure that we’ll see L2/L3 cache moving to a separate chip on a larger process while the rest shrinks down).