M1 Macs don’t give any useful diagnostic info so I can’t say what’s going on. On an Intel Mac, I would use the AGDCDiagnose command to get some info.
M1 Macs don’t use display overrides so we can’t do workarounds for some problems.
The CAC-1510 requires four lanes of HBR to support 2560×1600 mode. The M1 Mac should be capable of that.
Maybe try connecting the adapter to a Thunderbolt 3 dock. The HP Thunderbolt Dock G2 has a USB-C port that is part of a MST Hub which might be useful because it can convert two lanes HBR2 or HBR3 to four lanes of HBR (in case some lanes aren’t working).
I you want to try adding a custom resolution, the timings for the supported modes are:
[email protected] 49.306kHz 71.00MHz h(48 32 80 +) v(3 6 14 -)
[email protected] 98.529kHz 268.00MHz h(48 32 80 +) v(3 6 37 -)
but M1 Macs don’t use display overrides so it probably won’t help to create a custom timing.
What does the script at https://gist.github.com/joevt/e862b0088ef58b9144877d01401bcee8 show?