SUCCESS!
Searching the Internet tonight for a solution, I came across this Reddit thread.
It seems that the problem was caused from the extra audio drivers installed as plugin by Microsoft Teams. After removing the MSTeams audio driver folder and restarted the problem disappeared .
* */Library/Audio/Plug-Ins/HAL/MSTeamsAudioDevice.driver* *
I 've seen similar reports for other games that also had sound problems and after users removed any extra audio drivers, sound started working again. Looking into this problem I saw similar reports about Zoom audio drivers as well.
By the way removing the Teams audio drivers does not prevent Teams from working normally, So I have no idea what these drivers do. They are an optional module during Teams setup.
Following the directions provided in that thread, I removed the MS Teams driver in question, rebooted my M1 and… TA-DA! My Wow audio is back! HOORAY!
NOTE: The reboot is necessary. I launched WoW immediately after deleting the driver and the sound still didn’t work. It took a reboot to set things straight.
Actually, I didn’t remove the driver completely. Instead, I created a zip archive of the original driver file and saved it in the same folder as the original file. I then deleted the original driver file. If I ever need to reinstall the driver file I can just expand the Zip archive in place. Wasn’t sure it would work, but it did.
After thinking about this a little, I remembered that MS recently released an Apple Silicon version of MS Teams – the day I installed that version of MS Teams closely corresponds with when I first lost audio in WoW. Clearly there is a conflict between the two programs.
I hope this resolves the problem for all of you who have been plagued by it. And to Redditor u/mastorak – A HUGE WORLD OF WARCRAFT THANK YOU!