Other than those needing a more compact bike for taking on the train or whatever, the main reason for a smaller wheel is torque. This applies to hubmotors, not mid drives.
The smaller wheel with the hub motor in it will climb hills better, leave a stop sign better, etc. The effect is actually a lower gear. In the case of longtail cargo bikes, a 20" rim can mean the cargo deck can be lower to the ground, greatly improving handling. Only the motor wheel need be small, the other wheel can be larger if you want it that way, provided the frame is built for different size wheels.
The cons include the possibility that the wheel is more affected by large potholes, etc. For a purely pedaled bike, a very large diameter wheel may roll better, coast farther, etc. But stuff like that stops mattering much once you have a motor to take up the extra effort of riding a 20"