Hi Spook2U,
the "Attack Waves: Shrink Nests & Worms" setting only shrinks the collision box of worms and nests to enable biters to move freely through cluttered bases and does not affect the actual size of nests or worms. the setting works for vanilla and new enemies.
here is the setting info text on mouse over:
"Reduce the collision box size of nests and worms by 50%. May cause overlapping entities due to the collision box being smaller than the entity graphic."
there is no setting for the actual nest and worm size for the new enemies.
the new enemies start out small but will get bigger as the evolution lvl increases.
If you want them to start out bigger you can increase the "World: Beginning enemy level" but this will also increase their health and damage