Ask HN: How do you connect your M1 MacBook Air to your iMac?

To my knowledge that feature has long since been removed.

https://support.apple.com/en-us/HT204592

You can use mac-to-mac airplay, but it's only available on the latest version (beta) of Monterey and only if you're using a modern mac (which I assume your iMac is).

https://www.apple.com/macos/monterey/features/

To use it as an external monitor.