Hey all,
I'll provide the official statement we have from the development team below with regard to weapon growth / shrinkage when unsheathed versus sheathed:
We can confirm that the weapon resizing is working as intended. Weapons becoming smaller as they're sheathed is done to help avoid major clipping issues during parkour, combat, and other common actions. As a result, this is not a feature that will be changed.
I hope that this helps clarify the perceived growth, and why this happens. I'm happy to pass forward any feedback you have on the visual elements of this process, however it is not something that is planned to be changed at present per the statement above.