I only super-quickly breezed through the document but one thing jumped out at me.
The gnome ability to get +1 to AC when attacked by a medium or larger opponent.....strikes me as being a callback to the 3e era of stacking up countless small modifiers instead of relying on the 5e basics. Unless Level Up is planning on reintroducing lots of these style mini-modifiers I would suggest that this be somehow reworked to drop the +1 AND the Medium+ and instead use advantage/disadvantage.
I somewhat agree with your point that we have to be very careful about situational bonuses getting out of hand. However, the reason this one doesn't bother me is that normally when the encounter contains small creatures, its most or all of the monsters in the encounter. I admit this is a large generalization, but that has been my experience. Since Levelup is intended to be crunchier, I think a little bonus stacking comes with the territory.
So I would expect the Gnome to just add +1 to its AC, and in the times its actually fighting small creatures it subtracts. And as long as that is the only AC modifier for the character I think that's fine. Now if its +1 AC for that, but then +1 AC in swamp, and +1 AC against flying creatures....etc etc, then we are back in the situational muck.