I know for a fact fret size has an effect on tone. If the fret was just a termination point for the string and the finger/fretboard didn't come into play why does a maple board sound so much different than a rosewood. The smaller fret brings the fingerboard up a bit more in the tonal equation, IMO. There is a cat around these parts named M. Dove that has been running mandolin frets on everything for quite some years. It has an effect on tone for sure!!