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Arrived with no drop or spill damage. It will turn on and chime with backlight but no image on external or internal. After a couple minutes caps lock light can be turned on and off.
The M1s likely need to be signed into the OS to give you image on external. You may need to have the internal display plugged in on the 820-02016 or else it will be stuck in the SLEEP 3 state.
If caps lock light comes on the machine is booted. Are you positive this is not no backlight? It can be very hard to see on the newer retina displays.
Also tried connecting to external while the internal was connected as TCRS suggested, external backlight comes on as well but no image on either screen.
Backlight voltage is good, so the problem is with image only.
Looks like M1 graphics issue, if you miss internal/external image at same time.
Did you try PRAM reset?
Turned back on only maintain pressing T key. Hear the chime but nothing else happens, nothing shows up on target mac. Caps lock light still reacts within a few minutes even after only pressing T key after being turned off
Try on all USB-C ports.
Also open Disk Utility on the other MacBook, to detect it.
Machine should turn on when you start pressing T key; maintain pressed and check in Disk Utility.
The symptom points to M1; internal graphics issue.
But is strange that you cannot complete DFU, not get access in target Disk mode.
Looks like lost cause...