The 'Size:' tag refers to what size inventory slots the item can be stored in. If you right-click-and-hold a container, you will see it says 'Can hold:' or 'Slot size:' or something, indicating what size the slots are.
The sizes are TINY SMALL MEDIUM LARGE GIANT, and you can only fit an item in a slot big enough :)
So for example you could not store this item in a jewelry kit, which has TINY slots.