According to Macrumors, the latest update, macOS 11.3, on an M1 powered Mac may remove Rosetta 2, but it will depend on your region.
MacRumors contributor, Steve Moser, located a code string in the macOS 11.3 beta 3 which says:
“Rosetta will be removed upon installing this update.”
“Rosetta is no longer available in this region. Applications requiring Rosetta will no longer run.”
This move might make things complicated as Rosetta 2 is Apple’s translation layer that allows X86 applications to run without any issues on M1 based Macs. The software performs its magic in the background once you open any X86 based application.
As per MacRumors, Apple’s macOS 11.3 update for M1 Macs might remove Rosetta 2 in some regions due to legal issues. They have reached Apple for an official statement.
The removal of Rosetta 2 will make it really difficult to run X86 based applications on your M1-powered Mac.