Why does resetting to factory settings not restore 2019 Macbook to Catalina?
&quot;Factory reset&quot; is a slight misnomer. It doesn't really mean to restore everything back to the same state that it had when it came from the factory, because the original contents of the hard disk are not save anywhere when you upgrade the OS or applications. When you installed Big Sur, Catalina was overwritten; whenever you upgrade an application, the previous version is deleted.
What it really means is that all personalizations are removed. Accounts other than the built-in ones (e.g. Administrator) are removed, and system and application preferences in the built-in accounts are set back to their default values. Applications that weren't included with the system will be removed, but applications that were included will be kept in their upgraded versions. I also assume that local Time Machine snapshots are deleted.
The purpose is to get a &quot;clean&quot; system, usually because you intend to give/sell the computer and don't want them to get your personal data, passwords, applications whose licenses don't permit transfer, etc. It's not intended to go back in time and revert everything you've ever done to the system.
In the old days a computer came with external disks containing the operating system and applications, and you could reinstall the system from them to get back to its original state. Now they no longer do this (and recent Mac models don't even have DVD readers, although one could imagine doing it with flash drives), but you can still reinstall from the network to get an earlier OS.