Here is one successful setup that I have tested
So the answer to the question is: YES!
3 External monitors working + Mac's own = 4 active displays.
(note: photo image is slightly distorted around edges, making left most monitor look broader than it is, also the shape of the mac distorted. Due to wide-angle setting on Android phone).
Answering my own question straight away because I knew the answer and wanted to post this as a Question-Answer combo, I found this can be done successfully using 2 DisplayLink graphics adapters and 1 AV adapter.
Here's how I set it up:
installed DisplayLink driver downloaded from their site for Apple Silicon
plugged the 1920x1080 monitor into the HDMI input of the Apple USB-C Digital AV Multiport Adapter.
plugged the Anker USB hub USB output into the USB input of the Apple USB-C Digital AV Multiport Adapter.
plugged the other 2 monitors into the HDMI input of each Startech USB32HDPRO adapter.
I plugged the 2 Startech USB32HDPRO adapters each into a USB port on the Anker Hub.
I plugged the Apple USB-C Digital AV Multiport Adapter into one of the USB-C/Thunderbolt ports of the MacBook Air M2.
Arranged the monitors in System Settings on the Mac so that they aligned and that the mouse pointer could move between them as expected.
The 1080p monitor is at the far end of the monitors and I have arranged it vertically as a portrait and I was able to set this in the Settings accordingly, good for document letters/A4 and looking at code, perhaps also for testing mobile form factor apps and videos enlarged.
There are other ways to do this with 2 of more monitors. Some companies offer combined solution docks or hubs. I would certainly consider those.
No affiliation, incentive, referral or benefit to me in my suggestions.
The benefit of my setup is that the items are individual and can be re-used for other computers.
The power can be connected to the USB-C input on the AV adapter. So the other USB-C/Thunderbolt port on the mac is free to be used.