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Teacup means a dog under 4 lbs and under 7 inches tall. Teacup is a not an official term, it's just a casual term to describe a small dog. No, I definitely do not think that pugs get that small. Also cross breeding a pug with another breed-- like a teacup poodle-- would not result in a teacup pug anyway because the pug mother is still too big. Plus the puppy wouldn't even be a pug, but a mixed breed.
However, there is a dog that is called a Miniature Pug. One dog that is referred to as a mini Pug is a mix of a Chihuahua and a Pug dog. It is also called a Pughuahua or a Chugg (sometimes spelled 'Chug'). Some refer to this crossing of two purebreds as 'designer' or 'hybrid' dogs.