You are correct.
Docker has issues on an M1:
Yep, I believe fly defaults to using local Docker if it’s available. And so that experience makes sense: once you added Docker locally, fly CLI noticed, and so used it. Until you said explicitly not to, by adding the --remote-only flag.
As for whether fly should detect it is running on an M1 (and so recommend using the remote builder instead) I agree that would be a nice improvement to avoid that issue.