I found a solution for this. I tried on the 6.1 kernel and the 6.6 kernel. You need to first install snap manually by running these commands:
sudo pacman -S snapd
sudo systemctl enable –now snapd.socket
sudo systemctl enable –now snapd.apparmor
sudo ln -s /var/lib/snapd/snap /snap
once you do that logout and then log back in. Try snap by running:
snap version
if that returns then you can go and then enable the snap repo and download the cache in pacman and bigstore. After you do this, installation of snaps work perfectly. This is something that might be added to the base image to avoid this issue.