Intro
Thumbelina joins after defeating the 2nd chapter core guardian. Her ability Tiny Princess shrinks or unshrinks items. Shrinking an item changes its stats. Unshrinking a shrunken item returns the original item. Most shrunken items become worse than the original, a few are "neutral" (some stats increases while other decrease), and some become better. This guide only lists items that are "neutral" or become better. I have placed asterisks (*) after neutral items.

Example
Here's an example of Tiny Princess. You should keep in storage, Alice's starting body armor, Prisoner Garb. It provides just 1 Def, when shrunk into SM Prisoner Garb, it provides 25 HP, 14 Def, 5 Men, 1 Luc. This guide does not list element resistances (Air, Water, Earth, Lightning, and Fire resistance) but you can assume that shrinking items not followed by an * will increase element resistances. In fact, Prisoner Garb has -5 element resistance, but SM Prisoner Garb has 12 element Resistance.

Note that shrinking/unshrinking will permanently remove prefixes and upgrades from equipment.

Items that can be shrunk/unshrunk
All equipment can be shrunk and unshrunk. However, this is not the case with consumable items. Shrinking a consumable item is permanent. Consumable items should NOT be shrunk because all result in worse items with only a few exceptions. Intuitively, key items (keys, memos, etc) cannot be shrunk, except the Heart Slate in Waterway dungeon.

Prisoner Garb (1 Def)

• SM Prisoner Garb (14 Def, 5 Men, 1 Luc, 25 HP)
  
• 13 Def, 5 Men, 1 Luc, 25 HP

Cloth Armor (5 Def, 6 Men)

• SM Cloth Armor (6 Def, 8 Men)
  
• 1 Def, 2 Men

Gillie's Suit (13 Def, 14 Men)

• SM Gillie's Suit (16 Def, 18 Men)
  
• 3 Def, 4 Men

Coal Armor (4 Def, 6 Men)

• SM Coal Armor (5 Def, 8 Men)
  
• 1 Def, 2 Men

Oak Armor (15 Def, 17 Men, -9 Agi)

• SM Oak Armor (19 Def, 21 Men 9 Agi)
  
• 4 Def, 4 Men, 18 Agi

Nurse Outfit (46 Def, 48 Men)

• SM Nurse Outfit (58 Def, 60 Men)
  
• 12 Def, 12 Men

High and Low (3 Atk, 32 Def, 10 Tec, 34 Men, 7 Agi)

• SM High and Low (4 Atk, 40 Def, 13 Tec, 43 Men, 9 Agi)
  
• 1 Atk, 8 Def, 3 Tec, 9 Men, 2 Agi

Scientist Coat (66 Def, 35 Tec, 68 Men, 15 SP)

• SM Scientist Coat (83 Def, 44 Tec, 85 Men, 19 SP)
  
• 17 Def, 9 Tec, 17 Men, 4 SP

Pilot Suit (45 Def, 48 Men)

• SM Pilot Suit (56 Def, 60 Men)
  
• 11 Def, 12 Men

Recoil Jacket (47 Def, 50 Men)

• SM Recoil Jacket (59 Def, 63 Men)
  
• 12 Def, 13 Men

Lucky Dress (45 Def, 48 Men, 8 Luc)

• SM Lucky Dress (60 Def, 60 Men, 25 Luc)
  
• 15 Def, 12 Men, 17 Luck

Melee Hairband (1 Atk, 3 Def, 3 Men)

• SM Melee Hairband (1 Atk, 4 Def, 4 Men)
  
• 1 Def, 1 Men

Power Ribbon (3 Atk, 6 Def, 5 Men, 3 Agi)

• SM Power Ribbon (4 Atk, 8 Def, 7 Men, 4 Agi)
  
• 1 Atk, 2 Def, 2 Men, 1 Agi

Power Headband (6 Atk, 25 Def, 9 Men)

• SM Power Headband (18 Atk, 33 Def, 12 Men, 25 HP)
  
• 12 Atk, 8 Def, 3 Men, 25 HP

Flame Hairpin (27 Def, 12 Men)
Gust Hairpin (27 Def, 12 Men)
Bolt Hairpin (27 Def, 12 Men)
Terra Hairpin (27 Def, 12 Men)
Wave Hairpin (27 Def, 12 Men)

• All gain "SM" in their name and have the stats (34 Def, 15 Men)
  
• 7 Def, 3 Men

Aegis Helm (48 Def)

• SM Aegis Helm (60 Def)
  
• 12 Def

Ruby Earrings (54 Def, 17 Men, 6 Agi)

• SM Ruby Earrings (68 Def, 21 Men, 8 Agi)
  
• 14 Def, 4 Men, 2 Agi

Curly Wig (55 Def, 43 Men)

• SM Curly Wig (69 Def, 54 Men)
  
• 14 Def, 11 Men

Vatic Earrings (33 Def, 56 Men, 12 Agi)

• SM Vatic Earrings (41 Def, 70 Men, 19 Agi)
  
• 8 Def, 14 Men, 7 Agi

Prodigy Tiara (8 Atk, 87 Def, 20 Tec, 65 Men, 10 Agi, 20 HP, 20 SP)

• SM Prodigy Tiara (10 Atk, 109 Def, 25 Tec, 81 Men, 12 Agi, 25 HP, 25 SP)
  
• 2 Atk, 22 Def, 5 Tec, 16 Men, 2 Agi, 5 HP, 5 SP

Prisoner Cuffs * (1 Def)

• SM Prisoner Cuffs (10 HP)
  
• -1 Def, 10 HP

Cursed Ring * (6 Tec)

• SM Cursed Ring (12 Def)
  
• 12 Def, -6 Tec

Smart Watch (12 Tec, 12 Men)

• SM Smart Watch (15 Tec, 15 Men)
  
• 3 Tec, 3 Men

Life Armband (150 HP)

• SM Life Armband (188 HP)
  
• 38 HP

Andvaranaut (-30 Atk, -30 Def, -30 Tec, -30 Men, -30 Agi, -30 Luc)

• SM Andvaranaut (-18 Atk, -18 Def, -18 Tec, -18 Men, -18 Agi, -18 Luc)
  
• 12 Atk, 12 Def, 12 Tec, 12 Men, 12 Agi, 12 Luc

Note: Andvaranaut prevents all status effects except K.O. I personality would not use it. The stat penalties are bit too high.

Hide Bracelet * (38 Def, 6 Agi)

• SM Hide Bracelet (48 Def)
  
• 10 Def, -6 Agi

Long Sword * (14 Atk)

• Little Sword (9 Atk, 25 Agi, 25 HP)
  
• -5 Atk, 25 Agi, 25 HP

Guard Sword (31 Atk)

• SM Guard Sword (39 Atk)
  
• 8 Atk

Master Sword (98 Atk, 25 Def)

• SM Master Sword (123 Atk, 31 Def)
  
• 25 Atk, 6 Def

Shrinking large swords reduces Atk, increases Agi, and increases either Luc or HP. Giant Sword -> Small Tachi, is the only one that becomes entirely better.

Chipped Tachi * (19 Atk, -7 Agi)

• Chipped Short Sword (12 Atk, 5 Agi, 10 HP)
  
• -7 Atk, 12 Agi, 10 HP

Broken Sword * (21 Atk, -10 Agi)

• SM Broken Sword (13 Atk, 7 Agi, 10 HP)
  
• -8 Atk, 17 Agi,10 HP

Claymore * (32 Atk, -13 Agi)

• SM Claymore (20 Atk, 9 Agi, 10 Luc)
  
• -12 Atk, 22 Agi, 10 Luc

Giant Sword (39 Atk, -17 Agi)

• Small Tachi (47 Atk, 11 Agi, 18 Luc, 25 HP)
  
• 8 Atk, 28 Agi, 18 Luc, 25 HP

Great Sword * (44 Atk, -20 Agi)

• Mini Sword (27 Atk, 13 Agi, 10 HP)
  
• -17 Atk, 33 Agi, 10 HP

Elite Sword * (49 Atk, -22 Agi)

• SM Elite Sword (30 Atk, 14 Agi, 10 HP)
  
• -19 Atk, 36 Agi, 10 HP

Horse Slayer * (66 Atk, -25 Agi)

• Rat Slayer (40 Atk, 19 Agi, 10 Luc)
  
• -26 Atk, 44 Agi, 10 Luc

Heavy Sword * (85 Atk, -27 Agi)

• Light Sword (51 Atk, 20 Agi, 10 Luc)
  
• -34 Atk, 47 Agi, 10 Luc

Grisly Sword * (103 Atk, -35 Agi)

• SM Grisly Sword (62 Atk, 23 Agi, 10 HP)
  
• -41 Atk, 58 Agi, 10 HP

Eagle Sword * (218 Atk, -12 Def, -49 Agi)

• SM Eagle Sword (131 Atk, 15 Agi, 10 HP)
  
• -87 Atk, 12 Def, 64 Agi, 10 HP

Ripper Scissors (38 Atk, -4 Def, 26 Tec, 2 Agi)

• SM Ripper Scissors (48 Atk, -8 Def, 44 Tec, 5 Agi)
  
• 10 Atk, -4 Def, 18 Tec, 3 Agi

Man-Eaters (55 Atk, -6 Def, 38 Tec, 6 Agi)

• SM Man-Eaters (69 Atk, -12 Def, 73 Tec, 9 Agi)
  
• 14 Atk, -6 Def, 35 Tec, 3 Agi

Karkinos (99 Atk, -16 Def, 67 Tec, 15 Agi)

• SM Karkinos(124 Atk, -24 Def, 131 Tec, 13 Agi)
  
• 25 Atk, -8 Def, 64 Tec, -2 Agi

Lantigos (123 Atk, -26 Def, 80 Tec, 23 Agi)

• SM Lantigos (186 Atk, -26 Def, 149 Tec, 16 Agi)
  
• 63 Atk, 69 Tec, -7 Agi

Fist
Knuckle Horns * (29 Atk, 18 Agi, 8 Luc)

• SM Knuckle Horns (36 Atk, 31 Agi)
  
• 7 Atk, 13 Agi, -8 Luc

Spear
Spear (28 Atk, 4 Tec, -5 Agi)

• SM Spear (35 Atk, 8 Agi)
  
• 7 Atk, -4 Tec, 13 Agi

Trephine Pike (44 Atk, 11 Tec, -11 Agi)

• SM Trephine Pike (55 Atk, 12 Agi)
  
• 11 Atk, -11 Tec, 23 Agi

Hammer
Giant Hammer * (20 Atk, -4 Agi)

• SM Giant Hammer (12 Atk, 3 Agi, 10 HP)
  
• -8 Atk, 7 Agi, 10 HP

Ogre Hammer (105 Atk, -39 Agi)

• Goblin HAmmer(116 Atk, 34 Agi, 25 HP, 40 SP)
  
• 11 Atk, 73 Agi, 25 HP, 40 SP

Scythe
Heavy Scythe * (41 Atk, 14 Tec, -1 Agi)

• Light Scythe (25 Atk, 15 Tec, 3 Agi, 10 HP)
  
• -16 Atk, 1 Tec, 4 Agi, 10 HP

Giant Scythe (45 Atk, 25 Tec, -3 Agi)

• Small Scythe (50 Atk, 37 Tec, 16 Agi, 25 HP)
  
• 5 Atk, 12 Tec, 19 Agi, 25 HP

Whip
Bull Whip (51 Atk, -10 Def, 25 Tec, 4 Agi)

• SM Bull Whip (64 Atk, -6 Def, 59 Tec, 5 Agi)
  
• 13 Atk, 4 Def, 34 Tec, 1 Agi

Bow
Long Bow * (33 Atk, 7 Agi, -46 SP)

• Little Bow (20 Atk, 5 Agi, 10 HP, 3 SP)
  
• -13 Atk, -2 Agi, 10 HP, 49 SP

Heavy Crossbow (70 Atk, -1 Def, 15 Agi, -75 SP)

• Light Crossbow (84 Atk, 3 Def, 18 Agi, 5 Luc, 25 HP, -45 SP)
  
• 14 Atk, 4 Def, 3 Agi, 5 Luc, 25 HP, 30 SP

Staff
Ash Staff (4 Atk, -7 Def, 38 Tec, 3 Men, 19 SP)

• SM Ash Staff (5 Atk, 3 Def, 48 Tec, 4 Men, 3 Luc)
  
• 1 Atk, 10 Def, 10 Tec, 1 Men, 3 Luc, -19 SP

Bomb
Skull Bomber (44 Atk, -3 Men, -16 Agi)

• SM Skull Bomber (55 Atk, 3 Men, 10 Agi)
  
• 11 Atk, 6 Men, 26 Agi

Microphone
Giant Megaphone (25 Atk, 58 Tec, 34 Agi, 15 Luc)

• Dwarf Megaphone (62 Atk, 47 Tec, 41 Agi, 19 Luc)
  
• 37 Atk, -11 Tec, 7 Agi, 4 Luc

Hardtack (80 HP Heal)

• SM Hardtack (150 HP Heal)
  
• 70 HP Heal

Jelly Supplement (1800 HP Heal)

• SM Jelly Supplement (3000 HP Heal)
  
• 1200 HP Heal

Cursed Fragrance <--> Blessed Fragrance
Note: Shrinking yields the other.