More monitors tend to wake up the GPU more often and takes more processing to drive so technically it creates more heat...
@Allen_Wentz
However, the 2018 Mac mini ran the Intel i3-8100B, 8500B, and 8700B all of which had a 65 watt thermal design power. Meanwhile, the M1 in the mini hits something like 30 watts for the whole system while the M1 Pro laptop seems to draw something like 40 to 60 watts under load so thermals is not the reason why the current mini is limited to 2 displays.
I'd imagine it's down to the M1 Max is too much for the mini form factor and there's not enough of the chopped M1 Pros available to put in the Minis to make it viable.