Question Is the Magic Keyboard for the 2021 24 inch m1 Mac better on Bluetooth or USB?

Better how? Some keyboards have a tiny delay on bluetooth and of course there is battery life to think about. The Apple keyboard does not seem to have any issues being use wirelessly though. In general wired is the best option, wireless for convenience or some look that people try to go for. If you are going to get one anyway or already have it, just see if there is any difference you can tell.
 
Better how? Some keyboards have a tiny delay on bluetooth and of course there is battery life to think about. The Apple keyboard does not seem to have any issues being use wirelessly though. In general wired is the best option, wireless for convenience or some look that people try to go for. If you are going to get one anyway or already have it, just see if there is any difference you can tell.
I noticed that whenever I unplug my sister's i mac (while it's off) it disconnects the keyboard (according to her)?
 
shouldn't it connect automatically after being plugged in and turned on?

Do you mean re-connect to bluetooth? Yes the system should remember the connections but sometimes you need to go into the bluetooth devices and connect it again.

You need to give some better details about exactly what is happening so we are not dealing with a bit of info at a time with each post. Start at the beginning, what is the issue with what equipment?