Will the laptop be fully working with the lid closed (ie with external monitor+mouse+kbd), is the cooling compatible with this configuration ?
When on my desk, I do not have much space for an opened laptop between the monitor and keyboard, so my current thinkpad is happily tucked away closed elsewhere and running.
Yep! The system works more or less the same at any hinge angle, including closed.
After reading this thread, I assume I have an actual (maybe solvable) issue.
From the beginning I have thought it was a design fault - any time I close the lid while the computer is turned on, the fans start to spin up due to heat. It does not matter whether or not the CPU is actually used - it can run in C10 (total <5W power consumption) and still overheat.
It looks like the vents above the keyboard towards the screen gets closed off when the lid is closed, and that is causing the fans to be unable to get rid of excessive heat, even though it does not sound like they are running when the lid is open?
If I am supposed to run the system closed, I guess mine is faulty in some way?
Batch 6
Does it in all OS’ I have tried.
Linux kernel 5.14.0.
BIOS 3.06
Any way I can troubleshoot? Is it a known issue?
One thing you could try if you can please, is to update to BIOS 3.07 just to rule out something that was corrected in the latest revision.
If after doing that you still see the same behavior, I would highly recommend creating a support ticket with Framework directly. They will get you squared away. 
Just an update on this based on further evaluation. The system will function normally with the lid closed, but the thermal performance will be somewhat better with the lid open.
Unfortunately, that did not solve my problem. But it is nice, that I can limit the battery charge to 85 % now 
Also, powertop now reports both discharge rate of battery and power consumption by system.
Fortunately, that is not necessary!
On a random hunch, I thought - what if my system is actually using more power while lid is closed, hence needing to cool more? So I ran powertop and got a snapshot just as I opened to lid, and sure enough - CPU at 100 %! I did it once more and figured out that systemd-logind and journald is taking up all the resources… Looking in journalctl I saw that systemd-logind tried to suspend when the lid was closed, but did not have permission to do so. OF COURSE systemd is the problem and a nuissance! I totally forgot that all my test OS’ on this laptop used systemd, and I always disable suspend. systemd just does not get suspend disabled, when, you know, you disable it, it requires arcane knowledge about editing specific files in /etc/. So, my problem is fixed! Finally I can close the lid when the machine is running! 
A note here with benchmarks. I have a 2022 model with the Core i7-1280P CPU, and am definitely seeing some thermal throttling when running the laptop with the lid closed. It’s never enough to notice when using the laptop normally, but it does show up on benchmarks.
Cinebench R23 Multi-core score:
Cinebench R23 single-core score:
Lid open or closed, the laptop is always cooler to the touch than my Intel Macbook Pro, so it’s not been an issue, but you can definitely feel more hot air escaping when the lid is open, so it’s fairly clear that with the lid closed it can reach the end of its thermal envelope under sustained multi-threaded load. Then again, you’ll generally only see this in any measurable way when, say, rendering in Premiere or After Effects. Sustained single-thread load had a negligible difference open or closed.