[link|https://www.ifixit.com/User/4601275/Fasih+Shahzad|@fasihshahzad|new_window=true] I'm not the only one! Thank goodness (I'm sorry this happened to you but I'm glad I found someone else with this identical problem).
TLDR: My 2021 MacBook Pro's LCD backlight cable had a small tear resulting in the display backlight issue and when the tear worsened it would cause seemingly random system crashes which eventually corrupted my MacBook's firmware.
More context and my next steps:
-In my case, I determined that the boot failure and display issues were indeed due to a faulty LCD backlight cable. It started as an intermittent issue where if I moved the display, the computer would randomly shutoff. Cold reboot, and everything went back to normal. Fast forward a few months and the display simply would not turn on unless held at just the right angle. After rebooting a few times, up came the dreaded exclamation mark. I was at a complete loss thinking not only did the display crap out but now all of my data was gone as well.
-I tried a DFU restore over and over until it finally worked. I believe the solution to get around the '2006' error (in addition to another code I don't recall) was to download "Apple Configurator" from the Mac App Store: (https://apps.apple.com/us/app/apple-configurator/id1037126344?mt=12). Apple's official guide says it can simply be done right in Finder if both the restoring Mac and the corrupted mac are on Sonoma but this wasn't true for me (and most likely for you too). I followed the steps in this guide from Mac Lovin: (https://maclovin.org/blog-native/2021/putting-an-m1-mac-in-dfu-mode) and it FINALLY worked. After the successful DFU repair I immediately headed into recovery mode and backed everything up to an external drive.
-Upon further inspection of the MacBook, the LCD backlight cable had a very small tear which explained the intermittent nature of the issue. The source of the subsequent boot failures/corrupted firmware was due to the display cable either causing a short and/or the cable 'losing connection' which triggered hard crashes leading to the corruption.
-I was hoping that I could simply replace the LCD backlight cable with one from eBay but the display side connection is soldered and I'm not entirely comfortable disassembling the panel and soldering on a new cable. Cost effective if you have the skills, but I unfortunately do not. I reached out to a couple well-known (i.e. vetted) MacBook repair shops, one based in NY (iPad Rehab) and the other in TX (Rossman Repair Group), both of which also make awesome educational content on YouTube and are huge advocates of Right to Repair. Got a couple quotes and, while they were relatively expensive (~450-500) they'll be able to replace the cable for me without needing a new display/having to buy a new MacBook. I would have just bought the 'new' display assembly from iFixit but they've been out of stock for a while now plus then you have to deal with the resulting True Tone headaches.
That was very long-winded, but I wanted to comment and say you're not alone with this issue. I still have no idea how the cable started to tear as the laptop isn't my daily driver (i.e. stays at home) plus it's used on a lap desk ~99% of the time but at least I found a solid lead.