Go with the 16Gb of RAM and 512Gb SSD. The additional RAM will give you better performance. Bearing in mind that Xcode itself consumes at least 30GB of disk space you really should go for the larger SSD.
I use the Late-2014 Mac Mini, with 16GB RAM, 2.8GHz i5, 1.12Tb Fusion Drive, running the latest Xcode 13.4.1.
If given the choice, I would NOT be using it for Xcode. Some days it will work okay, but others (like today) it’s just soooo slow (the preview can “time out” just trying to do a simple ZStack/HStack/VStack preview). And, if it comes to an update, you need to book a couple of days off because you won’t get any work done at all.
The fact that it works with current Xcode is great and I commend Apple for still supporting it some 8 years later but, for user experience and actually getting any work done, I cannot recommend it at all.
It is my understanding that the Late-2014 Mac mini will NOT get the update to macOS Ventura.
This means that, although it may well be able to install Xcode 14 when it comes out, it’s likely to be abandoned before many updates into Xcode 14’s release cycle (about six months at most, I believe). I base this on looking at the history of Xcode 13 which ran on macOS Big Sur until 13.3, after which it would only run on macOS Monterey.
I can see no advantage whatsoever in using the Late-2014 Mac mini to run Xcode today, unless - and it’s a big “unless” - you really have NO other option (like me), and then it’s a case of being on borrowed time until you won’t be “current” any more.
After half a day of not being able to do anything, I gave my Late-2014 Mac mini the clean sweep (wiped everything and reinstalled macOS).
All I’m installing this time is Xcode and Sync (my cloud drive of choice), so that there’s nothing else bogging down the old mini.
It is more responsive today, but it’s still pretty slow.
If you ultimately end up going with this old model, then do not install anything except Xcode (which takes ages in itself). Don’t use the mac mini for anything else.