Actually I just watched a video on CNET about the Gear S3 review and they mentioned that Samsung will continue the Gear S2 because of it's size options, as far as a smaller S3, they didn't say anything about a smaller size. it only comes in 1 size for now at least.
Here's a link to that video below.
https://www.cnet.com/products/samsung-gear-s3/preview/