...According to my understanding, ALL of the forces (represented by arrows) in the diagram are equal in magnitude, whether the body M is accelerating or not...Correct me with some explanation...
Your understanding is not correct.
The tension force is not equal to the weight. The tension and the weight are NOT action/reaction pairs re the 3rd law.
You have to give up this idea: it is just plain wrong.
You can easily see, when you do the experiment, that the mass accelerates. Therefore, there must be an unbalanced force acting on the mass.
The explanation is to do as advised and draw the free body diagrams: your mistake, in your drawings, is to assume the conclusion.
Leave the tension as an unknown to be determined... then work out what it is.
This was basically my last advise.
If you will not follow advise, nobody can help you.
Note: the 3rd law reaction force cannot cancel out the force it is the reaction to... for eg.
The weight of mass m is the gravitational force of the Earth acting on mass m with force mg.
The reaction force acts at the center of the earth, and is equal and opposite to this. vis. the mass m pulls on the Earth with the same strength as the Earth pulls on the mass, but in the opposite direction. The Earth pulls the mass downwards, the mass pulls the Earth upwards.
That help?
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