Glad my input has helped some of you, for the time being.
I haven't contacted Apple yet. I work in IT and honestly hate every time they give me the run around. I want to gather enough info before I contact them that they (or they'd just suggest to go back to manufacturer's settings or blame it on the game). Unfortunately, I'm an Apple freak so I keep going back to them.
UPDATE: Regarding the automatic graphics switching, I did see it again. I upgraded Big Sur to the latest version yesterday and went ahead and tried playing without gfxcardstatus. Made sure automatic graphics switching was still off and once again the graphics switched back to the integrated GPU again. I saw the same issues again in the game (visual tearing, items missing or pixelated, significant lag, etc.). Exited the game and used gfxcardstatus, discrete gpu and it was once again working well. I will definitely contact Apple soon and will update you. I was really hopeful that they would have released an amd driver update. I know they have one for Boot Camp Windows, but nothing for ios.
P.S. @Bluebellflora you are amazing, I love all your tutorials and troubleshooting!