The difference here is that the M1 in the M1 mac mini is faster than Apple's phone SoC (the A16). The Qualcomm 8cx gen 3 (what a terrible name) in this machine is NOT faster than even Qualcomm's phone SoC (the 8 gen 1), let alone Apple's phone SoC. It's absurd to be selling a desktop PC that's weaker than a phone.
It's a chicken or the egg dilemma. Non-Apple ARM is too slow, so nobody wants Windows ARM, and nobody wants Windows ARM, so nobody is seriously working on consumer-targeted ARM. It will probably fail because Microsoft is generally bad at managing and marketing their hardware projects and coordinating with manufacturers and retail partners. Also, yeah, the pricing and performance is abysmal. But there is some sense to trying to lay the groundwork for future ARM SoCs running Windows.
Right now, the biggest driver for Windows ARM adoption is, ironically, Apple's M1 and onwards because of people running it as a guest OS through Parallels.
Also, frankly, I'm okay with Microsoft failing at projects like this. We don't need another Apple-like presence on the market.