Booting off the NVMe directly causes more issues than worth the trouble in many cases. Sometimes firmware updates break booting because timing or other variables change slightly.
With the data disk feature only the OS remains on the SD card, which is essentially just the container runtime and a couple of system services. These are mostly running from RAM/cache. Almost all of Home Assistant (e.g. Home Assistant Core itself, add-ons and it’s data etc). Is running directly off the NVMe and benefits from the speed. There is one more advantage of the data disk: It will soon be possible to move to a new installation without restoring from backup (adopt a data disk). You can simply install HAOS on a new hardware, attach the disk, and continue run your Home Assistant installation.
As Nathan indicates, take a full backup, download it to other storage (e.g. your laptop), then overwrite the NVME with a fresh HAOS image, start the Pi and restore the backup.
I know several other methods, but because SBC OSses are famous for extending the last partition, most are complicated and/or involve large block-device copy of empty storage.
And as hinted, Pis are famous for issues with storage controllers. Especially the USB3 variants, they are not RPT’s responsibility, so if you bought one with a chipset from the pool that has known issues, better make sure you have a bootable SD-card.
As a noob to HA with my uptime measured in days, I can’t comment other than to say I’m using this case Argon NEO 5 M.2 NVME PCIE Case for Raspberry Pi 5 – Argon 40 Technologies Web Store and this M.2 SSD. Crucial P3 Plus 3D NAND NVMe PCIe M.2 SSD. After booting from the SD and configuring the eeprom. i was able to install a fresh HAOS on the NVMe drive via the Raspyberry Pi utility, boot into HA, update my config.txt and… well, I guess we will wait and see. Now to discover some devices!