With the exception of the Mini-14 Target Rifle, which accepts only .223 Rem. ammunition, .223 Rem. and 5.56 NATO can be used in all Mini-14 rifles and Ranch Rifles.
Please note that "Military Surplus" 5.56mm NATO can vary greatly in its quality and consistency.
I can tell you that the XM193 is longer then the .223 cartridge. 5.56 has a COL of 2.250 and the .223 has a COL of 2.20. The 5.56 is also a hot round, if you look at the primers you will see they are flattening them out a little.
The way you understand it is correct...I've seen alot of guys run 5.56 in a .223 w/o issue alot at the range. Would I do it, probably not.