A cyberpunk game that takes place entirely in a replica of the Kowloon walled city would be cool as fuck. Just as much map "area" as fallout 4 but packed into a 1 mile cube.
Wait I had a similar idea once! Youre right that would be cool af, but very difficult to get right. In open world games you usually get away with "isolated" side quests, in a dense cube this is difficult – which might be a good thing, it forces interconnectivity.
I'd interpret vertical content growth as content per area, deep story lines, stuff like that. It's a common enough comment, see e.g. MMO players complaining about "content drought".