I'm the origional porter of the D3 mini to klipper
Hi - I run my D3 Mini5+ at 1.6A RMS with extensive heatsinking (on the back of the board, not on the plastic chip casing) with those settings. I have independently verified that the sense resistor (for klipper, since klipper assumes the .02) and that its correctly delivering current.
Klipper will immediately throw an error if your TMC chips are getting to hot. I wouldn't worry about it unless you see error messages.
As for your motors getting hot - do you know what their rated currents are? If they are rated for low-current use (say, rated for 1A) then running 1A RMS would result in ~80C casing temps, which would definitely burn.
Please investigate the motor ratings, I fully expect the mini is doing what's asked of it.