Sivadselim is (as usual) correct on all counts.
Basically a summary below:
A small setting means that speaker channel is being bass managed. It has nothing to do with physical speaker size.
A large (aka full band) setting means that speaker channel is sent a full-range signal.
For any speaker channel being bass managed, the AVR applies a high pass filter (usually 12 dB/octave) to that channel at the specified crossover frequency. It sends a duplicate signal for that channel to the subwoofer and applies a low pass filter (usually 24 dB/octave) at the specified crossover frequency. Thus forming a digital crossover. The asymmetry of the high/low pass slopes is rooted in THX protocol and is the subject for a separate discussion.
If the mains are set to large (full-band), there is normally an option which appears under the subwoofer menu called LFE+mains aka double bass, aka extra bass. When enabled, this sends a duplicate signal for the mains to the subwoofer, despite the fact the mains are already running on full range. This duplicate signal is then low-passed (usually 24 dB/octave) at the crossover frequency specified for the mains (if the AVR allows variable crossovers for each channel). If the AVR only offers one crossover for all channels, this duplicate signal is low passed at the crossover frequency for any other channels set to small.
The LFE (.1) channel is sent only sent to the subwoofer, if one is specified in the system. If a subwoofer is not specified in the system, the mains are automatically forced to large/full-range and the LFE channel is then directed to the mains. The LFE channel is never lost, even if there is no subwoofer specified.
The LPF for the LFE channel (if the AVR has this menu option) is the low pass filter frequency applied to the LFE channel. It should be set to 120 Hz. There is little channel content in the LFE channel >80 Hz, but occasionally we see something in the 100-100 Hz range.
For those experimenting with bass management, the Flight of the Phoenix sandstorm plane barrel roll bass effect (time stamp 15:38 about 4 seconds long at ~30 Hz) is exclusive to the LFE channel (at least it is on the older 480p DVD DTS track). I suspect that hasn't changed on the Blu-ray DTS HD-MA, but someone can confirm. That bass effect will be outputted by the subwoofer only if one is specified in the system. If one is not specified in the system, the mains will be forced to large/full-band and the bass effect will then be outputted from the mains.