After upgrade from F33 to F34, the newly-installed kernel was not the
default to boot. I had to explicitly select the F34 kernel in lieu of an
older F33 kernel at boot time. This was a surprise for me (I expected
the last kernal installed to become the default), but it may not be
germane in your situation.
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This sounds like a grubenv grub.cfg disconnect. The usual cause it's running 'grub2-mkconfig -o /boot/efi/EFI/fedora/grub.cfg' after upgrading to Fedora 34. But we might have a rare bug with converting from the old to new (same as BIOS) location.
What do you get for
grub2-editenv list
If the default kernel listed is correct, but isn't used as a default, do:
grep configfile /boot/efi/EFI/fedora/grub.cfg
Possibly related are a few reports of grub> prompt following upgrades.
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Chris Murphy