If you fix two trajectories $\vec{x}_1(t)$ and $\vec{x}_2(t)$, and want to determine when they are closer, you should find the minimum of the function
\begin{equation}
d = |\vec{x}_1(t) - \vec{x}_2(t)|,
\end{equation}
and not of $\vec{x}(t) = \vec{x}_1(t) - \vec{x}_2(t)$, otherwise you obtain two different results.
Let us take a two dimensional example, such as two trajectories which do not meet:
\begin{align}
\vec{x}_1(t) &= (at + b, 0) &&a,b>0 \\
\vec{x}_2(t) &= (0,c) && c>0
\end{align}
Here $d = \sqrt{(at + b)^2 + c^2}$ and by differentiation you find that the minimum is for $t = -\frac{b}{a}$ as expected. If you instead applied your condition, you would have found $a=0, c=0$, which is meaningless, since you have fixed the trajectories.
Please note that the minimum distance might not be obtained through differentiation! Take a simple one-dimensional example:
\begin{align}
x_1(t) &:= at + b, &&a,b>0\\ x_2(t) &:= c,&&c,d>0
\end{align}
The time when the objects are closer is of course the time when $x_1(t) = x_2(t)$, but that is exactly the point where $d$ is not differentiable. The one-dimensional example is somehow trivial because the two objects always meet (but maybe in the past!), so you can never use differentiation. I was able to use it in my first example because the two trajectories never met.
In order to minimize a non-differentiable function, such as $d$, you should look for its stationary points, and then verify if the absolute value of the function in the non-differentiable point is lesser or not from the stationary ones.
A physical interpretation of your condition, could come if you have not taken $\vec{x}_1(t)$ and $\vec{x}_2(t)$ as fixed, but rather as generic unkown functions.
Then, the condition
\begin{equation}
\frac{d\vec{x} (t)}{dt} = 0,
\end{equation}
would mean imposing that $\vec{x}$ does not change in time. Among the generic functions, you select the ones where the relative position of the two objects does not change in time: of course it means that the difference in their velocity is 0, meaning that $\vec{v}_1(t) = \vec{v}_2(t)$, which is exactly the condition you find.