Every issue under the sun - not waking up 50% of the time, waking up at 30hz and waking up at the wrong resolution. It was Infuriating. My 2018 mini has some display issues that i can just aobut live with, but it was unusable on the M2 Pro. Shame, because it was a nice bit of kit.
Have you tried setting everything to the exact match as the monitor input and output?
I believe it could have something to do with the settings, I have a M1 MacBook Air hooked up to a Dell S2721DGFA monitor and it wakes up and goes to sleep perfectly fine with the MBA closed, these are what my settings are showing when my MacBook Air is open + my display is on
MacBook Air Settings:
Extended Display @ Default 1440 x 900 (I use this to keep the MacBook Air Closed)
It could be different with a Mini so I would check, maybe make sure you are using the exact resolution as your external display settings
Dell S2721DGF Settings (On my
MacBook Air display Settings)
Use As: Main Display
2560 x 1440 (Default)
Refresh Rate: 60 Hertz (You must tweak the settings on both your external display and your Mac, Also you have to fix every settings on your Output (which is your Mac) so that your Mac can go to sleep properly and transfer the correct signal to your external display)
Rotation: Standard
And of course make sure your External Display settings (Resolution; wake up/sleep when signaled; and Hz) matches your Mac mini display settings, if not it could affect waking up and going to sleep
TIP: You can even try resetting your display settings on your Monitor cause ever little change can affect the output.
This is help coming from an MBA Air. I was previously going through lots of problems until I fixed it. Apple software is changing at a faster pace now and days so we gotta catch up haha