RCYH Said:
"Physical Escape Button not working – MacBook Pro (13-inch, M1, 2020): [...]]I'm hoping to understand from the community/debug to see if it's a user problem or a system issue."
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Does the esc button work on other apps?
Three Thoughts:
A. Single Out this User:
Try creating a new administrator user, logging in to it, and then trying this once more. Do you still get this error? If so, it is likely an error with the macOS being corrupted somehow.
B. Try Safe Mode:
In Safe Mode, login items do not run, and corrupt system files(i.e. caches) are intentionally reset as a way to fix issues
- Boot: in to Safe Mode: [Hold Down: shift key upon boot].
- Log in: as same user
- Delete: this user
- Restart the Mac
C. Reinstall the macOS:
Nothing would be deleted. It's just that items that have become corrupted or deleted, would be replaced or reinstalled back to where they should be. Go Here: How to reinstall macOS from macOS Recovery - Apple Support. Important: Be certain to create a backup of your Mac prior to all of this. That way, you can have something to restore from the Mac from, should anything go wrong with the reinstall. Once reinstalled, try this once more, seeing if you still get this error.