So I think I have the answer. I am returning my M1 mac mini. (sad face)
I have an Apple 30" Cinema display, connected to the Apple Dual Link DVI adaptor to Mini DP, then Mini DP to USB-C.
I also have a second display connected to HDMI.
There are some oddities that you need to be aware of. I think the limits are around how the display outputs are prioritised in the M1 mac mini.
Yes, you can get the full native resolution working, but it's a pain.
Big Sur seems to forget the display arrangement constantly. I think there are workarounds, but I am not certain. Basically the HDMI display ALWAYS gets priority / main screen status. The native cinema display res is forgotten constantly, and sometime the screen disappears completely, and you have to replug it.
There is a trick to hold option whilst clicking the 'scaled' list of resolutions to reveal the native res, but even this sometimes doesn't work, you need to go to default res (1280x800) then go back to 2560x1600.
So, all in all, we need Apple to give us a more pro M1 (or M2?) based machine before we can