M1 limitation is that it can support a total of 2 monitors. That means an internal monitor (if you have a MacBook/iPad) and 1 external monitor = a total of 2 monitors.
That is the reason why Mac Mini does support 2 external monitors - it does not have an internal monitor that "takes one slot". So you can connect 1 monitor to the HDMI port and 1 monitor to USB4.
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