This is a mostly a "yes" answer. Let me explain.
The Xencelabs macOS driver, once it is installed, will run as a background process on your Mac, and this part of the Xencelabs driver will natively run within the M1/M2 chipset. The "yes" part of the question.
The User Interface (UI) will not run natively within the M1/M2 chipset and still requires the Rosetta emulator to run on the M1/M2 chipset. This is a small part of the driver, and you will not notice any latency issues because of this.
The Xencelabs driver team is constantly improving performance and adding new features to our drivers that will help increase your workflow and allow you to concentrate on your work and not the tools.