Yep, can confirm this works great in the M1 Air. I've been running mine this way since I got it way back in 2020. Greatly lengthens the time you can play graphics-intensive games before thermal throttling starts to occur and your frame rate goes choppy.
I wonder what the performance improvement would be for a newer PTM7950 thermal pad. These have a different chemistry versus traditional thermal pads. They actually get better over time.
If I'm gaming I do usually use it plugged in to my external monitor with a mouse and keyboard, and the lid closed. And it certainly does get quite warm during extended sessions, but not blazing hot like my previous Intel MacBook Pro did.
Under non gaming loads (for me, that's mostly web, iOS development in Xcode, and streaming movies/TV) the M1 Air barely ever gets even slightly warm.
