When pressed up against a block and under the effects of Shrinking II, the block model clips in a way that allows cheating/x-raying through terrain.

This does not happen when under the effects of Shrinking I, and has yet to be tested on a clean environment- I'll update the ticket if I discover this is the result a mod conflict.

It's something I'm aware of, but there isn't much in the way of fixing it, as it's a default Minecraft issue. It's something to with the field of view being wider than the player's hitbox, but there's not much I can do.

Is it possible to add a really tiny buffer to the horizontal plane of the players hitbox when they're under the effects of Shrinking II to prevent getting close enough to the block to do this? I don't think it would take much of one to stop this from happening.

Only thing I could do is change the hitbox to a fixed size. However, eventually (with a higher amplifier, you'd become wider than you are tall. Right now it just gives the player the same proportions for the hitbox, and likely will remain that way. The clipping, for the most part, only will show pockets of air underground, which is difficult to judge the exact location of. At best, it just helps the player avoid falling in lava.

I'd argue this is a much more serious issue than you'd imagine. At best it's a fairly annoying graphical glitch, and at worst it can be used as a total exploit to very easily plan raids in a multiplayer pvp environment on secret/hidden rooms. At the very least, the option to disable Shrinking II in a config would be appreciated for server types where this would be a massive issue.

I can always add a config option to change the width hitbox for shrinking.

Per growth stage or for all stages? In any case, as long as it respects a server-side config this sounds like a perfect solution.

It's just a small equation that determines the width, based off of the height. So if you wanna change it, you can either set it flat, or change the equation to suit your needs.

Because Shrinking I seems to work just fine, I assume that applying the same horizontal width to the Shrinking II hitbox would make for a reasonable solution. Without personally being able to test it I'm not sure obviously, but that works out in my head based on my understanding of the problem itself.

It might. The width is a 3rd of the height, and as the height of Shrinking 2 is 0.45 (25% of the height of base), its width is pretty small.