The outsized impact of a bad employee is definitely a potential of a small team / company. Maybe I've just been lucky, but for the most part the closeness of a small team also invites more visibility and accountability from owners. Bad managers and employees, in my experience, tend to have shorter careers in small companies.
On the other hand, I've seen "staff" engineers at large companies who clearly have "leaves feedback on PRs" as a performance metric, because they would add trite, useless requests for changes that would conflict with feedback they left on other PRs, and would be exceptionally petty when confronted. These same people would be lauded because they lived up to artificial expectations, despite probably having a negative impact on the teams ability to deliver if anyone really looked at what they were doing.
On a small team, you can't get away with that for very long before it becomes apparent that something isn't working.
Most larger companies do performance management, where the bottom x% lowest performers are laid off every year or every few years. In my experience working in small companies, performance management has been nonexistent or very timid. HR almost always puts roadblocks when firing people, except for egregious acts like sexual harassment or stealing, making it next to impossible to fire bad performers. Likewise, bad people (who are basically somewhat competent or not incompetent) still run amok regularly and are actually given relatively free rein because of nonexistent HR, weak HR, nonexistent management, weak management, or just plain nepotism (knows the VP or founder, for example) or all of the above.
Larger companies have many defenses against this sort of thing, and they actually work a lot of the time. Of course, there are large-group politics wherein huge groups (200-300+) battle against one another, in large companies. But those are of a different nature and are considerably less nasty.