So the M3 can now drive 2 external displays on laptops with the lid closed... except that's not new!
Apple introduced this capability into the M2 already. It's why the M2 Mac Mini supports two displays over Type C/Thunderbolt, while the original M1 Mac Mini does not, and requires one display to be on HDMI. The laptops are logically equivalent to a Mac Mini with the HDMI port hardwired to the internal panel.
The only reason this wasn't enabled on M2 laptops so far is that it requires extra firmware support to disable the internal panel and reconfigure the primary display pipe for external mode. The firmware has lots of special support for the internal panel, so it's not "just" another screen connected to the system, and there's a lot of stuff that has to be done properly to make this work as intended.
Now the question is whether Apple will backport this to M2 or not. DCP firmware nominally has an identical interface synced between all platforms, so it should be a common codebase, so it should be easy to do. But they might explicitly lock it out, because I suspect Apple have a habit of not wanting to admit something was unavailable on a given machine due to software/firmware not being ready on time, and they'd rather just pretend its not supported...
And if they do lock it out on purpose, it's an open question whether it's something we can work around on Asahi or not.
(Technical details: the M1 has one primary display controller hardwired to eDP and one external display controller connected to a crossbar that leads to the Type C DP PHYs and the Thunderbolt packetizer. The M2 moves the primary controller to the crossbar too, so it can be repurposed to output via the Type C ports too. M3 is presumably identical. All baseline chips still only have 2 display controllers total, and this is cost driven and not easy to increase without a major die size increase since the display controllers are huge. The change to the crossbar, on the other hand, is essentially "free" and makes perfect sense to do.)