I contacted support, and am going through the support process.
Here’s an important comment from them about expected behavior:
It would be helpful if you could provide guidance about what the intended/expected behavior is supposed to be when plugged in and at the charge limit. Is the machine supposed to still say ‘charging’?
Regarding your query about expected behavior, the battery should ideally remain in a “charged” state when plugged in and having reached the configured charge limit, rather than continuously cycling between charging and discharging. The machine may still display “charging” depending on how the operating system interprets the hardware signals, but it should not draw power from the battery while on AC power under normal conditions.
However, certain factors—such as the specific charger in use, power management configurations, and operating system behaviors—may affect this functionality. The fact that your Nano II 65W[*] and Apple 96W chargers maintain consistent behavior suggests that power delivery plays a role in the issue you’re experiencing with your dock.
*I later managed to reproduce the issue with my Anker 65W Nano II charger
I tool a number of videos reproducing the charge/discharge behavior. I managed to reproduce the charging/discharging flipping, with battery draw, even without the charge limit, with my 65W Anker Nano II, which I think is quite interesting. I see similar behavior with all the 65W chargers I own.
My 96W Apple charger on the other hand seems to supply plenty of juice so the issue never occurred with it.
With all the testing I did (including resetting my mobo), I am now escalating my ticket. I encourage others who are seeing this behavior to open support tickets as well.