Joe Rossignol, MacRumors:
One of the key new features of macOS Monterey is the ability to AirPlay content to a Mac from other Apple devices, such as an iPhone, iPad, or another Mac. According to the macOS Monterey features page, AirPlay to Mac works works both wirelessly or wired using a USB cable, with Apple noting that a wired connection is useful when you want to ensure that there’s no latency or don’t have access to a Wi-Fi connection.
AirPlay to Mac also allows users to extend or mirror an Apple device’s display to a Mac, and we’ve confirmed this works on a Mac-to-Mac basis.
More detail in the original post but, as Joe points out, looks like the return of Target Display Mode.