Your configuration should support a Dock on the external display.
Apple states that when Displays have separate Spaces is enabled, the Dock should be available on all displays. (Apple Support)
First, open System Settings >> Displays and confirm that the external monitor is shown as a separate extended display and is positioned above the MacBook's built-in display, as intended.
Apple documents that display arrangement is configured from System Settings > > Displays. (Apple Support)
Then open System Settings >> Desktop & Dock and confirm Position on screen: Left and Automatically hide and show the Dock are enabled.
Move the pointer onto the external display and directly against its left edge.
If the Dock does not appear, temporarily turn Automatically hide and show the Dock off.
If the Dock then appears on the external display, that would indicate that the problem is associated with the Dock's automatic hiding behaviour.
If it still does not appear, restart the Dock with Terminal: killall Dock
The Dock should restart automatically. Test the external display again.
Keep Displays have separate Spaces enabled during these tests.
I would not change the display arrangement or delete Dock preferences yet.
If the Dock still does not appear after these tests, the next step would be to isolate whether the problem occurs specifically with the combination of macOS 27, the M1 MacBook Air, the external display being above the built-in display, and a left-positioned auto-hidden Dock.
Apple documentation: Change Desktop & Dock settings on Mac and Connect displays to your Mac