Because they'd much rather use their own high-density server designs instead of dealing with Macs that really aren't made for datacenters, and M1 has no clear must-have benefit over those justifying that effort outside of the macOS use case.

Now if Apple were to selling/license M1 chips to them, that might be different, but there is no indication that's going to happen in any way, and then the current work based on Macs wouldn't really be preparation for it.

I disagree. I think it’s obvious that if they went into it big, they wouldn’t just buy retail Macs. The current work would be testing the market and the experience of providing MacOS as a server. If there’s demand for server M1 chips, why wouldn’t Apple sell them? It’s a completely different market from their laptop consumer business. Bottom line: if the market demands M1 on servers, there’s billions to be made supplying them.

Apple clearly isn't interested in others offering macOS servers on non-Apple hardware, their licensing practices make that clear. If not to run macOS, AWS customers have no reason to demand M1 cores, and AWS has little reason to want to buy M1 chips over their own designs. And Apple and AWS are not the kind of companies to go in a deep partnership with shared designs etc over something like this.