It sold very poorly. Despite all of the YouTubers and social media posts calling for smaller iPhones, the real demand for these is very small.
The older demographics generally prefer larger phones because they have larger screens, which are better for aging eyes.
You also have to understand the psychological profile of us "utilitarian" iphone users. We only get one when our hands are forced either hardware failure or forced software obsolescence. The iphone mini came to market and was discontinued all in the time I was still using my SE.
That's what sucks about these huge dominant companies. They suppress interesting products because they don't reach the huge sales they need to make a difference to a trillion dollar company. And smaller companies can't compete against these behemoths.
My best guess is that the kind of person who would found a company capable of making such a phone won't do it because they know it doesn't have potential to make them fabulously wealthy (just regular old wealthy) because it's inherently limited in scale. And the big companies don't do it because, while such a line could be profitable, in the absence of competition, it's more profitable to force their consumers to buy the "main" line and not make another product line.
Then you have to deal with the fact that the people with obscure requirements have a million other requirements. The person asking for a small phone then complains it doesn’t have a headphone jack, and AV1 decoding, and 16gb memory, and an unlocked bootloader, and whatever else.
It was absolutely this manufactured “range anxiety” that killed it.