With the disclaimer that I have zero knowledge of the MacBook Neo hardware, but I do know a bit about GPUs in general (including having written some GPU-accelerated drivers for Windows and the associated cursor-handling code), I'm going to make a wild guess: this lag is caused by waiting for the GPU command queue to flush.

As a bit of background information: the GPU is fed commands from a queue that the CPU writes to. These commands perform the drawing operations that the GPU is designed to accelerate. A hardware cursor is basically a small bitmap that can be positioned anywhere on the screen and moved around by simply updating position registers (which is normally done per mouse interrupt); the hardware draws it automatically. A software cursor is manually drawn by the graphics stack, which saves what was under it, draws the cursor, and then whenever it needs to be moved, writes the original data back, saves the data at the new position, and then draws the cursor there.

Flushing the command queue is necessary when switching to a software cursor, or otherwise doing software writes to the framebuffer, because you need to wait for the GPU to finish drawing what it has queued, or it may end up drawing over what software wants to draw, including the cursor. Or worse, the command is a blit (e.g. scrolling a window) and you end up with remnants of the cursor at its previous position.

This was going to be my suggestion because it also fixed a similar CPU/GPU related issue many years ago: Apple's own TV.app would have minuscule color handling differences whenever subtitles would show during a movie. This was driving me nuts while showing a moody black & white film for a movie night - every time a subtitle would pop up, the entire scene's black levels would shift slightly (and it wasn't any kind of adaptive/localized brightness or anything like that, it was the actual rendering).

Some online sleuthing revealed it was GPU related (pure GPU video decoding vs. the CPU overlaying subtitles on the screen), and that bumping up the cursor size (even the tiniest amount) in mouse settings would fix it. It worked.

It's barely noticeable, but I actually prefer the slightly bigger mouse cursor now anyway, so it's part of my standard macOS setup.

The other day my son and I were sitting in front of the XBOX ONE we (try to) use as a Plex client and laughing about how showing a new logo while the machine is doing something meaningless to us is an act of brand destruction and that they should be showing us a Playstation logo instead... And how with the NES you could just hit the power button and start playing. The cursor never lagged like that on the 1984 Mac.

All an App needs on MacOS seems to be a binary and a little .plist

the follow on prank was having all the xterminals 'moo' whenever new code was deployed to prod.

AND I'm not seeing this issue. What am I missing?

I'm on 26.4.

:shrugs:

EDIT: I guess I wait to update and install the latest version? Maybe the linked page could have stated there's a new regression in newer MacOS versions that introduced this?

The root cause for the issue is probably (I'm not an Apple developer) due to huge round rectangles on the window shape corners. Rendering the window with the corners would include rendering whatever other windows and widgets under the window. (Which will have a lag and some more operations with transparency, which the developers probably want to avoid - while I'm not sure about this part).