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M2 will enter the triode region first.
As M2 drain voltage (Vd2=Vout) drops, and its gate voltage (Vg2=Vin) is constant, two things should happen:
1) Drain voltage of M1 is pinned as VGS2 is constant (Vin-Vth) --> So M1 is still maintained in SAT region.
2) VGD2 should be smaller than Vth, so if the difference increased beyond Vth (as Vout drops, Vin-Vout increases) then M2 will enter Triode reg ...