Based on the Layout & Technology section of the Accessibility page, the tap area continues to be, at minimum, 48x48dp, thanks to padding:
Touch targets are the parts of the screen that respond to user input. They extend beyond the visual bounds of an element. For example, an icon may appear to be 24 x 24 dp, but the padding surrounding it comprises the full 48 x 48 dp touch target.
I can't speak to the intentions of the Material designers, but in my own work, some elements may appear smaller in order to effectively communicate hierarchy and reduce cognitive load.