I’ll offer something slightly different than the other answers. The truth is, when we say “physics breaks down” it’s just a more exciting way of saying “we can’t see what happens, so who knows if things work the same.” The Planck length is just the smallest theoretically observable distance, even with perfect microscopes we would never be able to see things smaller than the planck length.
Anything that happens that is smaller than that? We’ll never be able to see it. It’s entirely possible that some fundamental laws don’t hold at that scale but we’ll never know.
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