Combinational logic is simplified using Quine Quine–McCluskey or Espresso algorithms, or enhanced variants thereof, that generate multi-output, multi-level logic with minimised area, speed, power or testability.
Looking at state re-coding in general, we find similar or the same metrics that might be minimised, as well as some notion of the total number of state-holding flip-flops that we seek to reduce. Converting to one-hot coding can improve speed at the expense of area and converting to a binary encoding reduces state at the expense of speed. However, this sort of re-coding is not actually state minimisation.