Update: This is a bug that has been recently fixed with the release of macOS Ventura 13.1.
I have a MacBook Pro M1 14" and have it connected to a 5Ghz WiFi.
I can usually use WiFi and Bluetooth together (i.e. I have AirPods Pro and a mouse connected). Certain events, though, will slow down the Wifi speeds to a crawl and it will often only go back to normal after a reboot:
- waking up an another nearby device like an iPhone or an iPad (not the watch)
- any notification (even if hidden by DND focus)
- (re-)connecting a bluetooth device, i.e. temporarily taking out one AirPod and putting it back in.
The problem is most apparent when playing games over streaming services like GeforceNow. They become immediately unusable.
I have found a temporary fix which I will add as an answer, but I am very much open to better solutions.