Change maximum size of picture-in-picture window in Sierra
The file with settings is located at ~/Library/Preferences/com.apple.pipagent.plist

You can use http://www.nightproductions.net/prefsetter.html to edit this file and set the new dimensions. 


I tried changing the values, however those got reset to 0.25 / 0.225 once I restart picture in picture.

Hope this helps.