It's a perfect storm of several things that nobody really appreciates, plus a couple of things that are obvious when you think about them. The obvious things are that previous Apple chips have been used in devices that have a single display, and that, as a result the ability to drive two displays is less well tested at this point (versus the Mac Mini, which had either a standard discrete GPU or for the Intel models an integrated GPU that was already in use in the PC market, where multiple displays are quite common).
The things nobody appreciates have to do with HDMI, DisplayPort and Thunderbolt, namely:
- HDMI, DisplayPort, USB (even over USB-C) and Thunderbolt are all different protocols; they are not natively compatible as is sometimes supposed.
- While you can get passive adapters that let you connect HDMI to DVI, DisplayPort to HDMI, USB-C to HDMI and so on, this works because of special compatibility modes built into the various standards.
- Compatibility modes generally can't be chained. For instance, a passive DisplayPort to HDMI adapter plus a passive HDMI to DVI adapter won't necessarily work. Active adapters may make that work in some cases — or they may not — depending on whether they implement the required compatibility mode support.
For instance, USB supports DisplayPort Alternate Mode, Thunderbolt Alternate Mode and HDMI Alternate Mode. Thunderbolt can carry DisplayPort (as well as having a compatibility mode for DisplayPort-only devices), so it's possible to have DisplayPort over Thunderbolt over USB. Physical DisplayPort implementations are likewise often "dual mode", and can switch to using an HDMI or single-link DVI signal when they detect that that's what they're connected to. But Thunderbolt and the USB alternate modes don't support that. To add further confusion, some devices with DVI connectors can output HDMI signals but out of a DVI socket (yes, they really are different; HDMI is compatible with single-link DVI, but not other variants). And for extra fun, higher resolutions and refresh rates might require either dual-link DVI or HDMI, and obviously some devices may support both kinds of input.
So, why does this all seem to work for PC owners? Honestly, it doesn't always. Many PC owners have been saved largely by the fact that their graphics cards still sport DisplayPort or HDMI rather than Thunderbolt or USB-C connectors.
An additional complication with the M1 Mini is that it doesn't support HDMI Alternate Mode on its USB-C ports. That means that passive USB to HDMI adapters won't work.
Finally, the data rates required by modern displays mean that there are plenty of old cables out there that won't work or won't work reliably. Usually the cables that come with your display should be OK. Cable vendors are supposed to indicate compatibility with the various standards (and the various data rates) using a set of fairly confusing symbols, which don't necessarily make matters much easier either.
Anyway, hopefully that's all helpful to someone :-)