tl;dr
So far so good!
Backstory
I ordered an M2 MBA with the full intention of being able to play ESO while on the road. Because it's being used primarily for travel I chose the MBA over a Pro for the form factor. Since I knew I'd be using it for gaming, I decided to go a little overboard on the build and got some upgrades, praying they'd be enough to ensure acceptable gameplay: 8-core CPU, 10-core GPU, 24 GB RAM, 1TB SSD.
Installation
Installation didn't go too smoothly. I downloaded the installer and immediately got the "You need Rosetta" popup. That was expected. The Rosetta installation failed, and closing out to try again didn't help. I got an error message every time I tried relaunching the installer, it wouldn't even try installing Rosetta. I rebooted the machine and tried again. Afterward, launched the installer again and Rosetta installed very quickly, followed by the ESO Launcher. Complete success there.
The ESO Launcher began downloading game files, first at an agonizingly low rate of 10 Mbps, which soon became an excruciating 2 Mbps. I haven't tracked down the reason for the slowness. Could have been the game's servers, but some M2 MBA users have noted wi-fi slowness in some situations, so I'm not going to fully blame ESO for that. Since I didn't want to wait 10+ hours for the download, I threw my iMac's ESO installation onto a thunderbolt drive and plugged that into the MBA. Transferred all the game assets I wanted in a matter of seconds.
Dropped the biggest assets: vo_en (10.59 GB), vo_soundsets (1.2 GB) depot (83.3 GB) into the structure the launcher had already created. (Applications/Zenimax Online/The Elder Scrolls Online)
While I was at it, I put my AddOns and SavedVariables folders into Documents/Elder Scrolls Online/live (specifically excluding files like MachineSettings.txt, UserSettings, and ShaderCache.cooked) from the live directory.
Reran the ESO Launcher , and the game was ready to play. Minutes instead of 10+ hours.
Launching the Game
Worked my way through the MANY agreements thrown up, including accepting AddOns and got to the Character Select Screen. Here, I immediately went to Graphics Options and chose Fullscreen. I wasn't entirely sure how the game would handle Fullscreen on a MBA with a notch, but it did fine. Just put a black bar up there and used the rest of the screen.
Logged in with one of my characters, and was immediately spinning uncontrollably. I'd forgotten about that little problem... Closed, went to System Preferences/Security & Privacy, added the ESO client to both Accessibility and Input Monitoring. Relaunched the game. Then it worked as-expected.
Gameplay
I didn't mess with any graphics settings except making the game Fullscreen. Immediately login I was trucking along at 55-60 FPS in Vivec City. I was very surprised at how good the game looked "out of the box" even on a tiny screen (compared to my usual 27" iMac). The UI, especially with AddOns was quite cramped, but that can be expected on a 13" screen. I'll need to adjust the layout and sizing of things, maybe not use some of the AddOns on the MBA. Not for any performance issues, but just for space economy.
I did notice one odd thing in the graphics settings. The Resolution dropdown is empty. But things looked okay, so I didn't concern myself with that overmuch.
I played for a full 50 minutes, and keeping an eye on the FPS. it never once dropped below 42 FPS. After about 30 minutes of play time it settled in around 50 +/- 5, depending on what I was doing.
Thermal Throttling
I was led to believe by YouTube Reviewers/Sensationalists that the M2 would either drop to unplayable speeds within minutes or roast my flesh upon contact with the keyboard. This did not happen. The ambient temperature was at about 75 degrees. When I started playing, the entire surface was cool to the touch. After 15 minutes it was still cool to the touch. 30 minutes, and I could feel it warming up very slightly to a lukewarm temperature in the warmest area. By the time I stopped playing after 50 minutes, the area over the processor was just a little warmer than lukewarm. I've felt previous MacBooks (my work Pro, for one) reach uncomfortably high temperatures, this wasn't even close to that. As for throttling? It did throttle from the pretty solid 55-60 FPS I was getting when I first logged in to the fairly steady 50 +/- 5 FPS I saw after about 10 minutes. The lowest it ever dropped to was 42, and that was a momentary drop after wayshrining.
Overall First Impression
I'm seriously impressed and happy so far. I played for nearly an hour and got better FPS performance than I do on my (intel) iMac. I did all my "regular" stuff with no slowdowns or major issues. Did a bunch of wayshrining for dailies, ran my writs, played Tribute, no problems other than the cramped UI on the small screen. I'll try a longer gaming session this weekend to see if there is a performance drop after an hour or two. But for my use case (chilling on ESO for an hour or so at a time while traveling) it seems like this will be fantastic.
I've attached screenshots of the graphics settings it loaded up with. The only change I made was Windowed Fullscreen to Fullscreen.