When I got my M1 MBP there was no way, that I could find, to set up the computer and login the first time without using an iPhone. I don't remember the exact phrasing it gave me, but the only way I could get the system set up was my wife logging out of her iPhone, and logging into it as me. I don't know if this is newer than your experience, or there was some trick to get past it, but I couldn't find one.