I got reminded by Lorenzo Orlandi about this article from appadvice.com, dated march this year. Written by BY A.T. Faust III, it explains why a 7.85 inch iPad mini is technically feasible:
"If you do the math, a 7.85-inch tablet with a resolution of 1024 x 768 works out to a PPI of 163. 163!
See, when Apple was designing its first iPhone, company engineers determined through testing that the minimum comfortable size for an interactive element on a touchscreen display is 44 x 44 pixels. Anything smaller would yield erratic results. The pixel density used to arrive at this number, naturally, was that used in the first iPhone — again, 163 PPI.
Whatever the size of a given menu option in a given iPad app, it cannot shrink beyond Apple’s pre-established minimum. It might take a bit more hand-eye coordination, but overall interaction should not be affected.”
If Apple does this it’s a departure from what iOS have been up until now. An important strength of iOS is that you know the exact dimensions of the user’s screen.
If the iPad and iPad mini share the same layout, the app might not look perfect on either.
Unless, we simply get the option to make a specific layout for the smaller size format. That way Apple could say all existing apps work, but developers would still be in control to adapt the UI if they wish.