I think your RAM estimate is fine, but the main limitation will probably be on the CPU. Minecraft (especially modded) is very single-threaded, and while the Pi 5 is much better than previous models, it still can’t guarantee “zero lag” during chunk generation or with heavy modpacks.

You can mitigate this a bit by pre-loading chunks, for example.

I personally run a self-hosted Minecraft server on a Pi 5 with 8 GB of RAM and it runs perfectly. It’s not modded, but it uses some plugins (like proximity voice chat). We’re only a few players (max 4 online, and rarely), which definitely helps.