Yes, it happens completely automatically the first time you try to run an Intel program on your M1 machine.
Ooohh… Nice 
The trouble here will be the (few?) closed-source plugins, that are delivered to Andrew/team as binaries, they will have to be supplied in ARM format to work as well.
To sum up my understanding:
- Intel programs (DAW’s, Rack, …) running on M1: No problem, runs seemlessly under Rosetta2, which you get automatically the first time you try and run it. Hassle free.
- Intel programs running on M1 trying to load a ARM library (i.e. a plugin), or ARM programs trying to load a Intel library: Probably not, unless special provisions are made.
So, everything same architecture: No problem, which means since Rack and its plugins are Intel you’ll be fine if the DAW is also Intel. But the mixed architecture thing, not so much, but I have read reports of certain DAW’s of one architecture being able to load plugins of another architecture, but for that scenario you definately need to check the fine print on the manufaturer pages.