It's a tough market. The majority of people who want a smaller phone do so because phones aren't so important to them. And those people probably expect a cheaper device.

I think Apple would make a better selling product if they could chop an extra $100–200 from the price of the mini. A single rear camera, fewer SKUs (say, two colours and two capacities), and maybe a binned version of the A16 chip with one fewer GPU core.

Apple just released a 13 mini, is that not in the same screen size segment?

There are always rumours that Apple is ditching the smaller phone sizes, that's been the case from the moment they started offering smaller form factors. They do tend to keep the smaller phone models around longer between refreshes, which I think is what stokes the rumours.