For the record, it's possible to select a GAPPS compatible ROM within waydroid, using the following command:
sudo waydroid init -s GAPPS

At least in my experience though, even though theoretically it comes with Google Play Services and the Play Store, Strava wouldn't work.
I believe it might have something to do with Google Play Certification, see here -> https://docs.waydro.id/faq/google-play-certification

Thank you both.
I've figured out what the issue is.
The Installer for MacOS has been compiled for Intel processors.
It does not work with the new M1 chip.
Either due to incompatibility with the new chip, or Rosetta is unable to work via USB Debugging/ADB for some reason.
When I tried to install using an old Macbook Air with an Intel processor, then the installation worked.

I was able to recover it to Android 11 using the instructions here -> https://support.fairphone.com/hc/en-us/articles/18896094650513 .

I have now retried installing it from Android 11.
Initially it says it's rebooting into fastmode.
There it gets stuck on a screen waiting for devices.
If I restart the installation process from the menu, then this time it will display a "Continue" button when it gets to that screen, so it can proceed forward to download the firmware and flash it.
then it reboots into fastbootD. However the installer seems unable to recognize the device at this point.
One thing I've noticed is that when it issues the command to reboot into FastbootD, it takes roughly 25 seconds before it displays the FastbootD screen.

So yeah, now it's back to being stuck on the screen "Rebooting to fastbootd".

I've also tried going to Tools menu - Developer tools.
There it has an option called "Try again" and also another one called "Ignore".
None of which seem to work.

For the record, while the installer seems stuck scanning for devices, the device is recognizable by the fastboot devices command.

And now the phone will no longer boot into Android anymore.
When it starts it goes straight to the fastboot mode screen and stays stuck there.

I'm trying to install Ubuntu Touch via the official UBPorts installer for MacOS.
The installer is now stuck on a screen with the message:
"Rebooting..."
"Rebooting to fastbootd"

There are no buttons to click other than Donate and Report a Bug.

The phone is displaying the FastbootD screen, with the following options:
Reboot system now
Enter recovery
Reboot to bootloader
Power off

The device is definitely visible, as when I type the command fastboot devices the device appears.

I've tried to unplug-replug the usb-c cable but that didn't seem to help.

I have executed both steps to unlock the bootloader, on the fastboot mode screen it shows device status = Unlocked.

The phone arrived today and it has Android 12.
I've read here on this forum that it still works with Android 12 though.

Is there anything else I can try ?

@Moem thank you, it sounds like I can already migrate then.

Unfortunately I still need to rely on Whatsapp to communicate with my family. I'd also need to use Waydroid for certain banking android apps.
Are you able to use the phone's camera when running an app within Waydroid?
Like for instance, are you able to send a picture via Telegram/Signal/Whatsapp/Email, or even use the Android's own camera?

Thanks in advance,