Solved this on my wife's Surface Laptop 7 (Snapdragon) after two days of chasing it. Posting the full sequence in case it helps, because the answer turned out not to be the panel.
Same symptom as this thread: internal panel colours wildly wrong (posterised neon, but geometry and sharpness perfect), external monitors on a Surface Dock 2 completely fine. Triggered by docking/undocking and by screen sleep and resume while docked. Survived reboots.
What did NOT fix it: Win+Ctrl+Shift+B graphics reset. HDR off, Auto Color Management off, colour profile reset, colour filters checked. Removing the Qualcomm Adreno driver package with pnputil /delete-driver and letting Windows reinstall it. The Surface Laptop 7 driver and firmware pack, installed twice. Wiping the GraphicsDrivers Configuration and Connectivity registry keys. Cold power cycles, a 25H2 in-place refresh, and swapping docks.
Diagnostics that turned out to matter: UEFI, WinRE and Safe Mode always rendered correctly, so every good state was a low-resolution one. Toggling the built-in display off and on (Win+P to "Second screen only", then back to "Extend") restored correct colour instantly with no reboot, which is at least a usable workaround. The event log showed no display driver faults at all, no TDR events and no Adreno errors. What it did show was Windows Update error 0x80242016 against "Windows 11, version 25H2", meaning the update handler had been left in an invalid post-reboot state. On top of that, "Reset this PC" aborted at the final confirmation, which fits a damaged component store.
What actually fixed it: a full rebuild from the Surface recovery image (support.microsoft.com/surface-recovery-image) written to a USB key, rather than the built-in Reset, which could not run. Since then the panel is clean docked and undocked, both external monitors are detected, and sleep, restart and shutdown from the dock are all fine. The firmware menu also went back to loading in seconds, after a spell where it was taking five minutes.
My read is that the root cause was a corrupted Windows installation traceable to the failed 25H2 servicing operation, not a display fault. If your built-in Reset also fails, or the machine misbehaves below Windows, that is a strong hint. Try the factory recovery image from USB before booking a repair order.