I haven't viewed the code, but it's likely to have copied DF code which does the same thing when you have several extra smilies.
It is possible to add auto-sizing javascript but even that can be disabled in some browser options (like FF).
Otherwise, it's controlled in includes/nbbcode.php, approx line 149,
| PHP: |
if ($mode == 'inline' && $num_smilies > $inline_rows * $inline_cols) { $content .= "<tr align=\"center\"> <td colspan=\"$s_colspan\" class=\"nav\"><a href=\"$url\" onclick=\"window.open('$url', '_smilies', 'height=200,resizable=yes,scrollbars=yes,width=230');return false;\" target=\"_smilies\" class=\"nav\">$smilies_more</a></td> </tr>"; }
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(also further up where smilies are used in a single line)