It seems like roots don't fully explore the soil when you put a small plant into a large pot.
I find seedlings do better when the roots have to work a bit. My old man used to mix gravel in his starter mix. I always thought it was because he was cheap. lol. Hitting the side or bottom of a cup, or getting a little air prune stressing seems to make it work harder and build up a head of steam because once you go to a 3 gallon,
Boom, you can see it grow. That might be all in my mind though.
I grow lots. Thousands some years. Not so much lately but I always start 2x2 inch peat pots and sometimes jiffy pellets. It's all about the space they take up. This year I have 5 flats of peat pots, and 5 flats of Jiffy pellets with 90-100 per flat. The weaklings get culled at week 2, 4, 6 and 8 when they go out. At week 6 the best 30 get a 2 gallon transplant. I'll be left with about 100. Some will go in the ground without even one transplant, and the rest get distributed to friends. There's no way in hell I could do that starting in bigger pots.
In past years, with peat pellets, I've transported 1000 seedlings out to the field in one trip. You can't do that with big pots. Contrary to popular belief, in the ground, an 8 week old seedling in a small peat pot can grow as big as an 8 week old seedling in a 3 gallon pot. All you need is a good amendment in and around your hole.