Actually the reason it had to be done so large because physics in SL was based on sim physics frames. The sims tried to run at
60 fps 45fps but it was very likely that the physics always affected performance. Causing frame skips. But while still trying to match the same frame time delta, without the interpolation (this was seemingly done client side) this caused issues. (Prior to 2010)
So if the next sim frame did not have the objects colliding, it didn’t consider them to have collided. (Aka object going so fast that on next update it considered it outside of the bounding zone.) Speaking of experience, This is why bullets in SL were enlogated, forexample 1.2 m if going at 120m/s and combat zone walls at minimum 0.2 m thick; this made sure that the bullet hit anything even if the sim had a physics hic-up.
Since the physics in highfi are client side and at a much more higher rate (and hopefully with interpolation) this is much more unlikely to happen. So it can still Be calculated shapes
The shapes them selves were also not generated on run time, it is only done once, when the object was created. And then usually manually tweaked for best results.