So The Great Baggage Experiment failed - baggage service enabled, small flights are not checked in on the small check-in desks…
It looks like that, rather than use the non-connected small stands, the small flights are waiting on the baggage bay-connected medium check-in desks to become free, despite the fact that no baggage will be handled for those flights.
I have bug-reported this ACEO-41090
Perhaps the devs could hav a quick look to see if this is resolvable or whether a warning should be posted that this configuration is beyond the scope of the game…