Hi Heather,
You brought up an interesting point. I am not aware of any particular scientific research that has explored this area.
I would infer that with a small limited space, the axie's growth can be affected indirectly. Confined to a small space, there is of course the risk of poor water parameters and lack of hiding places, which in turn translates into stress. Stress would subsequently result in immunocompromise, inappetance and susceptibility to infections and illnesses in axolotls. Stress would be further compounded if the tank has too high stocking density (overcrowding), presence of aggressive animals or axolotls all vying for food, hiding places etc.
Inappetant, stressed animals would have poorer feed conversion rates because energy and nutrients are assimilated for fighting infections for example rather than geared towards optimal growth.
I have come across some misinformation from pet shop newsletters etc. that warned of keeping axolotls being kept in small bowls resulting in lop sided development of swim bladder. Axolotls do not have swim bladders. We want to provide ample space for axolotls for easier tank management and welfare reasons.
Cheers