I'm not sure if size should be the only factor in deciding what counts as "Inner Sphere" and what counts as "Periphery"; the Magistracy is still bigger than Andurien, and likely rivals (or exceeds) Regulus, both of which are still counted as Inner Sphere states.
I guess the convention of treating the periphery as starting such-and-such a distance from Terra may still hold sway, at least in part. If the bulk of a realm still lies on one or other side of this arbitrary line, it is considered to be part of one or the other.
For example, the former Rim Worlds territory that was gobbled up by the Lyrans in Operation ALMARIC was considered to then be part of the Inner Sphere, not the Periphery, since it now belonged to a "Spheroid" realm. Whereas worlds which had been part of the original FWL that are now under Marian occupation are now classed as "Periphery", since the bulk of the Hegemony is still considered to be an outer rim territory.
Cultural factors would play a role here, too. From as far back as the realm's founding, the Magistracy has affirmed its identity as a Periphery power, as oppose to an Inner Sphere one. Simply having a series of weaker neighbours (as it ended up having from 3079 through 3139) didn't make the Canopians see themselves as any less part of the Periphery, even if the neighbouring Great House was no more (as a federal entity).