Earlier quoted context omitted.
It's better than 1080p as it is much sharper and crisper, but 1080p at 27 inches results in rather large UI elements. An effective resolution of 2560x1440px (as seen in any iMac 27) seems like the proper resolution for a display of that size. Read more about it here: https://bjango.com/articles/macexternaldisplays/
I'm curios about this too, does the Mac Mini offer "scaled" options, like MacBooks do with their built-in display, when connecting to an external 4k monitor? I think it does some supersampling, resulting in higher effective resolution.
In my opinion 2x scaling is the only option and that leaves you with an effective resolution of 1920x1080 points - sure, it‘s sharp, but far from true 5k and more importantly the same screen real estate we used to fit into 20-24 incch displays for years. It‘s the wrong resolution for 27“.