The Kobolds in the game owe more to their Germanic origins (specifically the mine spirits here, leading eventually to the naming of the element Cobalt) rather than the DnD (later versions?) kind. This was a deliberate choice driven in part by a choice to go back to the origin of these creatures, and because the DnD kind is copyright to WotC.
There’s not a specific limit, no. The average Kobold height in game is around 36" and the sd is around 1.5". When a transformation begins a hash called tfcode is generated, based on your original character features and where it begins, and this is used to pick your eventual height based on the species mean, sd, and your current sex. Currently though there’s a limitation in that neither the neck or head are being transformed in size, so your character won’t end up as short as intended.