List not working when multiple transforms inserted

You would probably want to only make your object only look at the trash within it's range using something like this:

 using System.Collections; using System.Collections.Generic; using UnityEngine;
 
 public class BatChaser : MonoBehaviour {
 
  public Transform trash;
  public List<Transform> trash1 = new List<Transform>();
  //script disabler lag behind
  public LagBehind lagBehind;
  public float trashDistance;
  public float rotationDampening;
  public float moveSpeed;
  // Start is called before the first frame update
  void Start()
  {
      //lag behind disable
      lagBehind = GetComponent<LagBehind>();
  }
  // Update is called once per frame
  void FixedUpdate()
  {
      for (int i = 0; i < trash1.Count; i++)
      {
          //this line below fixes the deleted object reference
          if (trash1[i] != null)
          {
              trashDistance = Vector3.Distance(trash1[i].position, transform.position);
              if (trashDistance < 20f)
              {
                  lookAtTrash(i);
                  
              }
              if (trashDistance < 15f)
              {
                  lagBehind.enabled = false;
                  chase();
              }
          }
          lagBehind.enabled = true;
      }
  }
  void lookAtTrash(int i)
  {
      Quaternion rotation = Quaternion.LookRotation(trash1[i].position - transform.position);
          transform.rotation = Quaternion.Slerp(transform.rotation, rotation, Time.deltaTime * rotationDampening);
  }
  void chase()
  {
      transform.Translate(Vector3.forward * moveSpeed * Time.deltaTime);
  }

But note that it still will only chase the first object in the list that's within it's range and not necessarily the closest one.

Also, I just have to point out that you should either run everything in Update() or use Time.fixedDeltaTime. Otherwise people with slower machines will have a much faster object compared to everyone else since Time.deltaTime is the time between Update()'s. Hope this solves your problem, good luck!