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Pyro as Bill said:

A bit of extra cardboard should be able to make up for any size difference. All it would mean is that anyone buying Labo would have to buy a set of joycons which they would have to buy anyway if they want local multiplayer. I think it's more likely we'll see mini joycons on a smaller unit before an SKU with built in controls. They have enough empty space that they could lose an inch off the bottom and still keep the same button layout and features.

Nintendo would be able to get a lot more form factor size savings if they just integrated the controllers into the unit itself ... (buying another set of accessories makes LABO even less desirable since customers now have to cross two barriers such as the console itself and the required accessory on top of the games higher MSRP to access the content)