I’m an M1 user and I had no problem with the update. I had 4.24.2 just a minute ago and I could update to 4.25.2 and Docker Engine starts,
Since there was only one issue I could reproduce on Mac about in a year, but I alwys have the latest macOS too, if you have an older macOS, that could be the reason. As far as I know macOS 12.4 should still be supported, but the last couple of Docker Desktop issue son macOS were solved by updating to a newer macOS version.
I was a few versions behind the latest version of Monterey, after updating to 12.7.1 I can confirm docker is working now. Wish I had known that before nuking everything but, all good now.