My issue was when using the device with the DIN base and the battery on and a sensor (CO2L) plugged into the Grove Port A (I2C), the device would be working. But if I disconnect USB-C from my computer and switch off the DIN base power, then switch the DIN base back on and plug USB-C back in (simulating a complete power outage of mains and battery) the device would boot loop with the message about SDA being held low.

The only way for me to get out of the loop is to unplug the CO2L from Port A. Then the device would boot on its next attempt and the I2C port recovery would be successful. Finally, I could plugin the CO2L, reset using the button, and everything would work again.

The issue was I needed to call M5.Power.setExtOutput during setup() of the BoardM5CoreS3 class from the https://github.com/m5stack/M5CoreS3-Esphome repo's components.

void BoardM5CoreS3::setup() {
  M5.begin();

  ESP_LOGI(TAG, "Enabling 5V power output on the external ports");
  M5.Power.setExtOutput(true);

  ESP_LOGI(TAG, "Turning off display panel backlight");
  M5.Display.setBrightness(0);
}

I implemented this in a custom component which I then add as an external_component to my ESPHome config. I added additional functionality in a separate component, to expose the AXP2101 battery level, charging status, etc. I also added an automation action to allow printing out debug state info from the AXP2101, to help with debugging the IRQ and other power management concerns.

In my ESPHome config it looks like this now and the CO2L sensor works reliably now without the controller going into boot-loops from various power loss/power source change scenarios:

esphome:
  name: ${hostname}
  friendly_name: ${friendlyname}
  platformio_options:
    board_build.flash_mode: dio
    board_build.mcu: esp32s3
    board_build.f_cpu: 240000000L
  libraries:
    - m5stack/M5Unified

external_components:
  - source:
      type: git
      url: https://github.com/terpasaurus-midwest/esphome-fork
      ref: m5cores3
      path: my_components
    refresh: 2min
    components: [m5cores3_power, board_m5cores3]

board_m5cores3:
  id: m5_board

m5cores3_power:
  id: m5_power
  battery_sensor:
    name: "Battery Level"
    id: battery_level
  battery_present_sensor:
    name: "Battery Present"
    id: battery_present
  battery_charging_sensor:
    name: "Battery Charging"
    id: battery_charging

The simplest way for me to ensure the pins (and other things) are initialized is to import the m5stack/M5Unified library from PlatformIO, and the external component board_m5cores3 from https://github.com/m5stack/M5CoreS3-Esphome, then declare board_m5cores3: in the ESPHome YAML config:

esphome:
  name: ${hostname}
  friendly_name: ${friendlyname}
  platformio_options:
    board_build.flash_mode: dio
    board_build.mcu: esp32s3
    board_build.f_cpu: 240000000L
  libraries:
    - m5stack/M5Unified

external_components:
  - source:
      type: git
      url: https://github.com/m5stack/M5CoreS3-Esphome
    refresh: 0s
    components: [board_m5cores3]

board_m5cores3:

This results in M5.begin() being called. The M5 namespace on which it's calling begin() is provided by the m5stack/M5Unified C++ library. This ensures physical buttons and hardware are initialized properly for this particular board.

The begin method is defined here. On L349-343:

auto board = _check_boardtype(Display.getBoard());
if (board == board_t::board_unknown) { board = cfg.fallback_board; }
_board = board;
_setup_pinmap(board);
_setup_i2c(board);

That call _setup_i2c is calling this and this from deeper within the M5Unified's I2C library. That seems to cause SDA to not be held in LOW state.