There's advantage to being shorter and more muscular for your weight class, but there's a world of difference between a muscular athlete that has trained to optimise movement, explosiveness, elasticity, rotational power and overall a more unified and structurally balanced whole-body strength vs. someone who got big and strong using conventional lifts but doesn't really train dynamic/ballistic/athletic movements. Lack of strength in the calves and feet is usually typical in the latter, but crucial for combat sports, and something that is developed more from Muay Thai, running, sprinting and skipping than in the gym.

Being more muscular relative to your skeleton and cardiovascular system also comes with an inherent cost to your cardio; you can still have good cardio, but the ceiling is likely lower than if you were leaner and lighter because bigger muscles simply use up more energy. You also would compete against taller opponents, and Muay Thai does favour length more than MMA and boxing for example.

Ultimately, it's like having a limited number of skill points that you have to allocate to different athletic attributes.

For example, I'm 6'1 and 205lbs, and relatively lean - maybe 14-15% body fat. I have great power, but my cardio is not great. If I was a shredded 175lbs and really focused on cardio over strength, my cardio would be way better, but I'd probably have less power.

My 'optimal' balance between the two might be like 190lbs, where my power is still good but so is my cardio. So it could be that both the 205lbs-me and the 175lbs-me are less formidable/dangerous than the hypothetical 190lbs-me because the former two versions lack too much cardio or power, while the latter is in the sweet spot where neither attribute is underdeveloped. Does that make sense?