I think there are other benefits to being smaller as well, like accelerations and possibly recovery from going into the red. It kinda makes sense that the less excess blood there is to circulate, the faster you might clear lactate. VO2 max goes up also for this reason as you lose weight. I'm not a doctor or a physiologist, just sorta what I've thought.
My power stayed the same from 2018 into 2019 but I lost 10 lbs going from 155 to 145 and it made me waaaaay faster. OK I might have gained like 5 or so watts on FTP as well, but not 10.
I attribute this to my ability to rapidly upgrade from 3 to 2 in 2019 in breakaway situations. Again my power was the same but I was light, snappy and recovered very quickly.
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"Your beauty is an aeroplane;
so high, my heart cannot bear the strain." -A.C. Jobim, Triste