I'm going to open myself to being flamed, but here goes:
I have both an Atlas QC42 (10F with a factory-installed quick change gearbox) and one of the last 12700 ("Industrial" 12") Atlas lathes. The 12700 has an AXA tool post installed, and the QC42 has a shop-built tool post that was built by a co-worker over 40 years ago.
The small tool post is a piston type, and is about the size of an OXA. The tool holders can hold a 3/8" bit on top of a 1/8" shim. I use 3/8" square tool holders with TCMT inserts and 1/4", 5/16", and 3/8" square HSS bits. Given the amount of power (I run a 1/2 HP motor), and the low rigidity of the lathe, I have found that a larger tool post is unnecessary.
One advantage to the smaller tool post is that it rarely causes access problems. This is very handy when working near the tailstock center. It also doesn't extend past the machined flat above the T-slot of the compound.
My AXA on the 12700, on the other hand, is constantly in the way when working near the tailstock center. Other than that, it has the advantage of holding larger cutoff tools and boring bars. I use the same tool bits as the QC42, and have to shim up the bits in the larger slots of the AXA holders. I have a 1 HP motor on the 12700, and with the thicker ways, can take a heavier cut. Because of this, the AXA is more appropriate for this machine.
I've been using the QC42 with the smaller post for almost 40 years, and not once have I wished for a larger QCTP. I have wished that I had made holders for larger boring bars, but when I added the 12700 15 years ago, it made that unnecessary.