I guess it depends what you define as "smaller" or "bigger". Some brands feel comfortable at the higher end of the spectrum >44mm as their fan base or brand is more casual/sportier/younger etc. Production peaked in 2014/15 for many brands as they embraced a wider market and catered to the pent up demand for larger diameter timepieces, however in hindsight it is clear that supply increased prematurely over a short period, production adjusted and brands eventually realised that the preference was for 37-43mm. So I guess a healthy adjustment has occurred to what was an over supply of larger models. Although there remains a market for larger timepieces and brands need to cater for all tastes.
Patek never ventured into the realm of obscene (I'm referring to case diameter of course), although the latest collection is on average larger than historic collections, they offer sensible sizes across the board to cater to all tastes. I haven't noticed a readjustment smaller lately, maybe because the size adjustment after TS took charge was mild. I for one, enjoy and appreciate Patek much more now they offer larger cases and as they rarely exceed 42mm no matter the complication, I find I now have a more diverse and interesting collection.