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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.
Pug, breed of toy dog that probably originated in China and was introduced to England near the end of the 17th century by Dutch traders. The pug has a short muzzle and a tightly curled tail. It is a squarely built, muscular dog, with a large head, prominent, dark eyes, and small, drooping ears. At maturity it stands 10 to 11 inches (25.5 to 28 cm) and weighs about 14 to 18 pounds (6 to 8 kg).