So there are two issues being discussed in this thread. It seems like you’re running into the serious issue some others have been seeing and this the genesis of this discussion. Unfortunately, there’s not a good solution for that issue that anyone’s found, and Apple needs to get on the ball.
One issue being discussed here is general Bluetooth issues, I.e keyboards not working intermittently or dropouts / disconnects. That is not what this thread is about.
This thread is concerning a specific issue where the Bluetooth hardware disappears completely, and is shown as “not available” to OS X. No restores, software tricks, or diagnostics seem to help. In fact, running diagnostics shows Bluetooth not present.
This is not a software issue, and it’s a recent issue mostly associated with Catalina. It seems to affect the 2018 Mac Mini more than others.
I had this problem, and did extensive diagnostics myself and at the Genus Bar. Nothing could recover it.
The closest thing I can surmise, after 25 years working with both PC and Mac hardware, is that a firmware update to the Bluetooth portion of the combined Wireless chip fails during the Catalina upgrade and bricks that portion of the chip. If you look carefully at all OS X Updates, they contain one or more firmware updates - (DFUs, or Device Firmware Updates in Mac parlance) - which get applied at upgrade time.
Looking at the PCI ID after these upgrades on a failed machine, it appears something fails mid-upgrade in the firmware upload, and leaves the chip in an inoperable state.
Apple has released firmware patch utilities for these types of issues in the past, but as is per typical recent Apple, if it’s under a certain occurrence threshold they ignore it and deal with it case-by-case.
Luckily my 2018 Mac Mini was still within AppleCare, and the solution was to replace the logic board. Overkill, but seems to be Apple’s go-to fix at the GB these days.
If you’re having a true non-recoverable failure - indicated by “Bluetooth Not Available”, no Bluetooth device shown in system configuration or diagnostics, and no recovery even with a SMC reset or OS restore, this is likely your problem - I’d contact Apple support ASAP.
If you’re having generic Bluetooth issues like disconnects or dropouts, that’s really not the severe issue that’s being discussed in this thread - that can usually be solved by deleting Bluetooth prefs and .plists, and appears to be a software issue.