Diagnosis: This is a hardware limitation, not a bug
Your troubleshooting nailed it. Here's what's actually going on:
The Surface Pro 12" (1st Edition) with Snapdragon X Plus is missing something the other recent ARM Surface devices have — real USB4 ports. The Surface Thunderbolt 4 Dock needs a genuine USB4/Thunderbolt 4 connection to split one cable into two independent monitor feeds. Your Snapdragon Surface Pro doesn't have that, so the dock can only push out one display over USB-C DisplayPort Alt Mode, no matter which port you use.
That's exactly why your two tests came out the way they did:
Plugging one monitor into the dock and one straight into the tablet works because you're using two separate ports on the tablet itself, each doing its own thing — no dock involved for that second signal.
The Intel Surface Pro 9 works fine with the dock because it has actual Thunderbolt 4/USB4, which is what lets the dock split into two displays in the first place.
The Snapdragon + dock combo fails past one monitor because the port itself is missing the controller the dock needs to do that splitting.
Worth noting: even Snapdragon Surfaces that do have USB4, like the Surface Pro 11, only support two external monitors and some people still see occasional flakiness with multi-monitor setups. But your case is simpler than that — it's not flakiness, it's a port that was never built for this.
Bottom line: there's no driver or firmware fix coming for this. The limitation is in the hardware itself.
Your options:
Keep doing what already works — one monitor through the dock, one directly into the tablet's other USB-C port.
Swap to a DisplayLink-based dock instead of a Thunderbolt/USB4 one. DisplayLink handles extra monitors over USB rather than needing native video pipelines, so it sidesteps this whole issue.
If you still want to flag it to Microsoft, I'd send it in as a "please clarify this in your specs" note rather than a bug report — since it's baked into the chip and port design, not something a fix will change.