Hi Tarun,
I am using PS beta 23.1.0 on an M1 Mac, and the same issue occurs with v23.0.2 Intel under Rosetta II. I usually use an i9 iMac 27", but it is at the Apple Dealer for a repair. So, I swapped out an M1 Mac mini I have to use in the meantime. The versions are the latest updates from Adobe CC online.
The issue is that the instant my finger touches the Magic Mouse trackpad surface in all the tools, PS remembers the last place it was touched and causes the tool to assume I am continuing from the previous use. So, for example, using the Liquify Tool will result in an effect from the previous location to the current one, not assume I am starting a new. Moving a layer will cause the layer to jump off the work area to the side, and it has to be dragged back and so on. It's as if the mouse is possessed. LOL.
I will try your suggestions. I could try a different mouse, but as I mentioned, I am not seeing this using the mouse anywhere else.