The 14 is the smallest phone on the market right now.Maybe catering to a minority is pretty important if you want to establish your product line as the defacto standard. So far there still was the SE2/3, which for many was "small enough". With that gone I figure a sizeable chunk of those users will - albeit with heavy heart - switch to an android phone that maybe isn't what they wish they'd get, but is at least usable for them in the way they have chosen and learned to use a phone for decades now.
Bottom line: yes, a "mini" won't sell as well. But it will sell well enough to make a profit, and it will widen iPhone market share one way or another.
If people left iPhone for Android, they’d be going to larger phones.