I have a 16" M1 Pro with 16 gigs of ram, and it regularly struggles under the "load" of Firebase emulator. You can tell not because the system temp rises, but because suddenly Spotify audio begins to pop, constantly and irregularly. It took me a year to figure out that the system audio popping wasn't hardware and indeed wasn't software, except in the sense that memory (or CPU?) pressure seems to be the culprit.
This kind of sounds like someone is abusing perf cores and high priority threading in your stack. iirc, on MacOS audio workgroup threads are supposed to be scheduled with the highest (real time) priority on p cores, which shouldn't have issues under load, unless someone else is trying to compete at the same priority.
Even when I remove all "Intel" type apps in activity monitor, I still experience the issue though.