2020 M1 MacBook Pro: Built-in display does not show entire desktop (truncates 300px from right and 200 px from bottom)
Solution 1:
I believe the following happened:
Your MacBook display's native resolution is 2560x1600. However, the default setting on the 13-inch MacBooks is 1440x900@2x (making the UI slightly larger for better accessibility). What the MacBook is supposed to do:
- Render screen at 2880x1800 (to create 1440x900@2x)
- Scale down to 2560x1600
It seems your MacBook failed to do step 2 and just displayed the unscaled image natively, thereby truncating 320px vertically and 200px horizontally.
Although I'm not sure what caused this, the reboot into Recovery Mode might have forced a reset of the scaling settings, fixing the issue. Maybe choosing a different scaling for the display might have worked, too.
Solution 2:
Previous reboots did not recover desired behaviour. But having checked the presence or absence of symptoms during Recovery Mode as per Andreas Ley's comment in my original question (behaviour was normal), I reboot again into normal mode and correct behaviour remained.
So I don't know specifically what was at fault, but an interim Recovery Mode reboot helped to remedy the situation.