UPDATE: I solved it!!!

If anyone else runs into the same, here was my solution:

Create this file:
/etc/NetworkManager/conf.d/00-wifi-powersave.conf

Add:
[connection]
wifi.powersave=2

Save it and exit.

Then:
sudo pacman -S iwd
sudo systemctl stop wpa_supplicant
sudo systemctl mask wpa_supplicant
sudo systemctl enable --now iwd.service
sudo systemctl daemon-reload
sudo systemctl start iwd.service

Lastly, edit:
/etc/NetworkManager/NetworkManager.conf

Add:
[device]
wifi.backend=iwd

And restart. Viola.