One limitation with smaller scales is that the small size of the metal contacts means it is easier for dust and dirty track to interfere with the electrical circuit needed to drive the train. Moreover, the tight tolerances also mean friction can more easily interfere with the train moving.
One challenge with smaller scales is that the tiny metal contacts are more vulnerable to contamination by dust and dirty track, which can interfere with the necessary electrical circuit for the train's operation. Moreover, the strict tolerances also make it easier for friction to impede the train's movement.