Is she an AKC-registered Shih Tzu with a pedigree? I would imagine (but don’t actually know) that Wisdom Panel probably only uses pedigreed AKC- (and possibly some UKC-) registered purebreds for their reference database, and might well employ additional quality controls beyond that, such as always working closely with breed club officials to procure reference samples. If they *were* including (supposed) purebreds sourced from puppy mills and BYBs in their sampling, I’d think that would be a bad idea–it’d dramatically increase the likelihood of non-purebreds winding up in their reference pool, and therefore compromise their overall accuracy at picking out the breed in question in a mix. And since the Shih Tzu breed club [considers](http://americanshihtzuclub.org/imperial) “imperial” Shih Tzus to be a disreputable scam in which undesirably nonstandard dogs are marketed as “exotic” and desirable, it seems unlikely to me that Wisdom Panel would see fit to intentionally include “imperial” Shih Tzus in their reference database–by definition, no reputable Shih Tzu breeders are deliberately producing these dogs.
There are some breeds that are notorious for not breeding true to size–Chihuahuas and Italian Greyhounds come to mind; I don’t know enough about Shih Tzus or Miniature Poodles to know whether that might be true of them as well, let alone “imperial” Shih Tzus who obviously aren’t well-studied or well-documented. There are numerous genes involved in determining size; some have yet to be identified, and also some forms of inherited “shortness” may be recessive or polygenic recessive, and therefore will express only occasionally in a given population. And then there are environmental factors like poor maternal nutrition that can result in permanent non-heritable stunting, too. Not trying to argue WP’s findings are correct–they could very well be wrong; no breed test is infallible, but OTOH stranger things have happened than a 5-pounder and a (presumably) 10+-ish pounder producing a 4-pounder.