Actually, it IS true that many mechanics are biased towards small nations. The caiptal give extra basetax. This is particularly useful if you're a OPM. Forcelimits for small nations are relatively higher per basetax than for larger nations (as far as I can tell). A small nation gets more merchants, diplomats and missionaries per province. Small nations get more monarch points per province than larger nations.This is simply not true.
Etc. In other words, anything your country has in virtue of being a country, but which doesn't scale, is a bias towards small nations. This is why having vassals has benefits at all... personally owning every province in your empire is just not as efficient as having a bunch of small nations each getting the benefits that all nations get.
Now, getting more provinces is almost always good, but this doesn't mean there isn't a bias. If there wasn't a bias, a nation would get double diplomatic relations and double monarch points and double merchants when it took over another nation of the same size. They'd be proportionally stronger in every way. Not being proportionally stronger means they're disproportionally weaker. This is what "bias" means.