Doesn't seem to work for me. It just changes both the token and the effect icon leaving the effect icon covering the same proportion of the token.
I ended extracting the extension and going into the graphics/token folder for the extension and changing all the token_cond* images to be 32x32 from 64x64 and then editing scripts/manager_token2.lua and near the top changing the following line
local TOKEN_EFFECT_WIDTH = 32;
it was set to 58 I believe in the ordinal file.
The result was effect icons that and 1/2 the size of default and the token able to show 9 total effects, though at that point the whole token is covered with a 3x3 grid of effect icons.