Every official playable race in D&D, to the best of my knowledge, is either Medium or Small. Even for creatures that should be Large (meaning where the "monster" versions of such creatures are Large, such as Centaur, Minotaur, etc), the official playable race versions of those creatures are considered Medium, even if they are brushing up against the upper limit of Medium.
There are no official playable races that are Tiny. I was reading this question about issues regarding a homebrew pixie race and using equipment designed for at least Small sized creatures and up. This got me thinking about how feasible a Tiny playable race even is. Before I attempt to homebrew anything Tiny, I wanted to find out any potential problems before getting too into it, much like I did with this question.
Some issues highlighted in that other question (about pixies) include the aforementioned equipment size issue, but also things like (as mentioned at the end of the accepted answer) flying into the mouth of a creature and entering them, dealing damage on the inside (although this was in the context of enlarging an item inside a creature, but still...)
On the other hand, it's already possible to have a Tiny PC by RAW (although only temporarily) by casting enlarge/reduce on a Small creature (i.e. Gnome, Halfling, Goblin, etc) to make them Tiny. This implies there's nothing that a homebrew Tiny race could do that a Halfling Wizard couldn't.
For this last reason, I could conclude that a Tiny PC race is definitely balanced because a Small PC can be reduced via enlarge/reduce, and anything a Tiny PC can do, a reduced Small PC could also do by RAW; therefore, RAW must already be able to handle anything a Tiny PC can do. However, I believe this reasoning is flawed and that this conclusion is likely incorrect; I believe I must be overlooking something, some "gotchas" or other weird RAW interactions that the game was not designed to cope with.
What "gotchas" or other weird RAW interactions that the game was not designed to cope with would result in a Tiny PC, such as if one were to homebrew a Tiny playable race (such as a pixie)?
For the purposes of having an example, let's assume I want to homebrew my own pixie race, which will be Tiny. I'm not interested in existing homebrew Tiny races, including pixies, since the focus of this question is the balance implications of the fact that it is Tiny, not that it is a pixie specifically. In other words, this question is not "how to homebrew a pixie"; rather, "if I did, what to watch out for".
Also, this is not a duplicate of How to handle a Tiny Player Character in 5e?, because that question is asking for rules that already exist for a Tiny character, whereas I'm asking about unforeseen balance implications of allowing it. The answers there are useful, but they don't quite answer my question, which is about weird RAW interactions (incidentally, the same that would be true for a reduced Small PC as per enlarge/reduce, albeit only temporarily) and I believe that makes my question different.