Although Apple has recently documented the M1 Mac’s four boot modes – macOS, Recovery OS (rOS), Fallback rOS (FrOS) and Safe mode – there’s at least one other, Boot Recovery Assistant.
I’ve encountered this not infrequently now when trying to boot my M1 Macs into Fallback Recovery (FrOS). Sometimes, but not always, instead of the Mac starting up into FrOS or normal Recovery OS, it prompts you to authenticate with your password to “verify startup disk”, offering just your single short username. This is frustrating, as no matter what password you enter, it invariably responds that it’s “Unable to verify startup disk”.
Although it offers to try again, to make any progress you need to click on the Startup Disk… button, select your startup disk from the list of one, click Unlock… and authenticate to unlock that disk, then Restart… If you prefer, once you’ve unlocked the disk you can choose to shut down using its menu instead.
This is most likely to occur when you’re trying to boot in FrOS, by double-pressing the Power button and holding the second press until it informs you that recovery options are loading. My interpretation is that the Mac is getting the signal to boot into FrOS, but is unable to find a suitable BootPolicy for the disk image containing FrOS to be loaded. As it can’t then verify the startup disk, it enters Boot Recovery Assistant, where the user is also unable to provide suitable authentication. The only feasible options are to restart from the normal boot volume, or shut down.
This might appear more useful when the M1 Mac has a choice of bootable disks, when a bootable external disk is connected. So far, though, I’ve been unable to trigger Boot Recovery Assistant when I’ve had a bootable external disk connected to that Mac, so I can’t say whether that might apply.
If you want to use 1 True Recovery to change to or from using a bootable external disk, use its Startup Manager. Press and hold the Power button until the display shows Loading Startup Options, then release it. This takes you to the Startup Options screen. Wait until all bootable disks have loaded into the list, select the disk you want to boot from, then click Continue underneath it.
You can also make that disk the default boot disk by holding the Option key when you’ve selected the boot disk. That should change the button under the disk icon to read Always Use. You can also, of course, use the Startup Disk pane when booted normally.