Just to make it explicitly clear - I think there are 2 bugs involved - 1 is related to driver/firmware on older 5.4 kernel since on that version I couldn't get the adapter to connect even with the /etc/network/interfaces based configuration, but on kernel 5.10 it works. This bug deals only with not being able to connect via NetworkManager to my wifi even on 5.10. Once this is resolved I can go back and try to do bisection of the kernel which patch enables the /etc/networking/interfaces configuration to work.
Just to make it explicitly clear - I think there are 2 bugs involved - 1 is related to driver/firmware on older 5.4 kernel since on that version I couldn't get the adapter to connect even with the /etc/network/ interfaces based configuration, but on kernel 5.10 it works. This bug deals only with not being able to connect via NetworkManager to my wifi even on 5.10. Once this is resolved I can go back and try to do bisection of the kernel which patch enables the /etc/networking /interfaces configuration to work.