Nearest neighbour limited by point type

Sure, not Q but M. Good you spotted this
So if O and P are some mesurements (this is how I understand coordinates) in 2 perpendicular directions, I'd for sure recommend

(O2-O$2:O$1000)^2+(P2-P$2:P$1000)^2

(twice)

have a look on
0 0
and
0 5
5 0
3 3
The closest one to 0,0 will be 3,3 (some 4.25 units away)