Same problem with iPad OS 14.2 and Big Sur 11.0.1. Works fine via USB-C but no connection via Wifi. Both M1 MacBook Air and 2018 15in MacBook Pro have the same issue. Also via USB-C the Touch Bar doesn't work anymore either.

Ok signing in and out of iCloud on the iPad fixed the problem for me as well but its still a little messy. I had noticed Handoff wasn't working on my iPad but was across all my other devices. The signout and back in fixed this and also seemed to fix the Sidecar wireless issue as well but I did have to do a few reboots and USB connections. I don't remember any of this when it first came out so I'm hoping a few software updates will fix the issue. Also toucbar works on my M1 MacBook Air but doesn't on my 2016 MacBook Pro weird.