When you shrink or unshrink an entity, their bounding box will retain it's original size until it either moves or collides with another entity.

This also applies to the player if you keep sneaking after using the shrinking device. (in this case, moving or colliding does not update the bounding box)

1.1.0 Is now released, https://www.curseforge.com/minecraft/mc-mods/shrink_/files/3352335