Can the M3 MacBook Air drive two external displays without closing the lid?

Regarding the MacBook Air: No, not natively. With the lid open, it only supports one external display (up to 6K). To drive two displays, you must close the lid (clamshell mode) — then it can run one up to 6K and one up to 5K. For two displays with the lid open, you need a DisplayLink adapter, but that adds latency and uses CPU, so it’s fine for productivity but not for real-time tasks. If dual monitors with the laptop open is a must, get a MacBook Pro instead.