Hello, thank you for reaching out to Microsoft Q&A.
According to the Microsoft article here-
Office 365 apps should work normally on devices with a screen size below 10.1". Checking the display size of the iPad mini 7, it appears to be 8.3 inches, so you should be able to edit your documents or spreadsheets.
See -
What you can do in the Microsoft 365 apps on mobile devices with a Microsoft 365 subscription
However, there seems to be a bug or issue where the iPad mini 7 requires an Office 365 subscription in order to edit documents. This problem has already been reported, and feedback has been submitted directly to Microsoft. Since the iPad mini 7 is a new device and is categorized as a tablet, Microsoft may not have added it to the exception list for devices with a screen size below 10.1" yet. This is likely the reason you’re not able to edit documents for free on your iPad mini 7.
It works only with an Office 365 Subscription.
Here’s the feedback thread -
https://feedbackportal.microsoft.com/feedback/idea/ecfbc86f-4bed-ef11-a4dd-7c1e52c1c6b2