I'm trying to migrate from 1tb iMac to 256gb mac mini m1

Hmm, well one option would be to not use either the Setup Assistant nor the Migration Assistant. This would leave your new mini with the default macOS and Apple apps as installed from the factory. Then install the apps you need. As for the data, you can now try using Migration Assistant. However, note that it does not allow for specific app/data restoration. Regardless, you will most likely need to use an external drive to hold those 600 GBs. That drive could either be directly attached or a network drive/NAS device.

One option would be to use a mail archiving app, like Mail Steward, to archive your mail to an external drive. You can then access them as needed. I use this app as an additional backup method, along with Time Machine.

Sorry, but I'm not an Apple Mail expert by any stretch of the imagination. You may have better luck posting this particular issue in the macOS area of the forum. AFAIK, I do not believe you can move "On My Mac" mailboxes to an external drive, and still have them readily accessible from the Mail app. eMail on your provider's servers do not take up space on your Mac's internal drive.