I think toby can change sizes at will. I say this because the past two movies he has been sleeping in the crawl space of the kid's room and how they say he is sitting right next to them on a little stool or in a treehouse. But then you sometimes see them looking up at him and those loud footsteps that you hear throughout the movie are him in full form I a.ssume.
Maybe he changes form to befriend the kids as their imaginary friend
If dude is looking all brolic I doubt the kids will take too kindly to his monster-looking a.ss
I solved it, didn't I?