Downgraded to DisplayLink 1.6.0 solved the issue
I noticed that I had DisplayLink 1.6.1 on my work M1 MacBook Pro and 1.6.0 on my Personal M1 MacBook Pro.
Downgrading to 1.6.0 on my Work M1 fixed the USB passthrough issues I was seeing. Not sure if that is a bug but I guess I'll be sticking on 1.6.0 for awhile.
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