It has thunderbolt 5 ports but the only drives capable of using that aren’t widely available or out yet and cost just as much as a base model Mac Mini.

But it should be essentially the same speeds as the average internal m.2 drives it seems.

https://www.owc.com/solutions/envoy-ultra

In typical average everyday use, not much at all if you get a high quality external SSD.

Source: Me, with my M1 Mac mini using a Samsung T7 connected via USB.

Things I use frequently are on the 256GB internal SSD, such as Office 365 and Xcode. Huge things like games that aren't a huge deal if they take a few more seconds to load are offloaded to the external. The only inconvenience this setup has caused me is that I have to periodically uninstall old iOS simulators from Xcode to keep enough free space available for OS updates.