No living creatures
On reflection I think I would rule no living creatures allowed to make it simple. I would probably also rule that no powerful magic items were allowed either ... rationale being that the magic of the glove wasn't strong enough to overpower them. As for what constitutes "poweful magic" ... I'd just rule that on a case by case basis based on the level of attempted abuse.
On first thought i would have let lower level duration spells work fine, but the abuse with GMW is an obvious problem, so now I'd be inclined to rule that such spells are immediately canceled. This would take care of the reduce spell on undead issue. However, if someone found a very small undead creature I'd probably let them shrink it just cause it's pretty random and seems harmless enough, although I'd give the undead a saving throw to avoid. But it would have to be a small undead, not just a light one (no holidng ghosts just because they don't weigh much).
To me this is a fun item with a lot of good uses for heavy plot adventures and is not intended as a method for abusing or getting around other rules in the game, and so all my rulings would be based on that idea. Currently, my characters make great use of this item, though none have ever tried to abuse it in anyway, just being creative and interesting with it. But then again, there are a lot of plot based situations in my campaigns.
If a campaign is all dungeon crawling and fighting then there isn't much point to this item except to try and break some other combat rule (like extending GMW). In such cases I would recommend that the DM find another magic item to give their players instead.