A LUT will rarely, if ever, introduce banding just because it is a smaller cube size.
Actually, smaller LUTs are less likely to introduce banding as they tend to smooth-out colour effects/transitions...
The real issue with smaller LUTs is that cannot accurately represent rapid colour changes, as they have limited points as which changes/transitions can occur - obviously.
So if the colour eccetc you are looking to represent with a LUT is a subtle change smaller LUT will work perfectly well.
If the colour chnages you are looking to represent have a lot of intricate chnages, a smaller LUT may not be able to faithfully replicate them.
Mob Boss at Light Illusion