I think there is a bit of an exaggeration in the previous comment.
Feature sizes decoupled from process node names mid-90s somewhat mildly, with transistor density remaining accurate to the naming. With introduction of FinFET transistors (2012, Intel 22nm), feature size and node naming truly decoupled completely, but node naming still remained largely true to transistor density.
Transistor density started drifting apart from the node naming only recently, and in part it has to do with ever increasing difference in transistor density and its rate of improvement in different parts of the design, especially between logic (shrinks the fastest), SRAM (used for various caches and even register files), and IO (like DRAM controllers, shrinks the slowest).
3nm is smaller than 5nm. It's just there is quite literally not a single meaningful distance measurement in a 3nm design that measures 3nm, just like there is nothing 5nm in a 5nm design - most features are much larger than that physically. Further, (5/3)^2 ~= 2.8 may suggest that this is a 2.8x increase in transistor density, which it absolutely isn't, it's just nobody wanted to name the node 3.5 to yield more accurate and very traditional 2x ratio ((5/3.5)^2 ~= 2). Furthermore, even 2x would be misleading, only logic density increase somewhat approaches that figure:
logic: 1.7x
SRAM: 1.25x
IO: 1.11x
As chips contain all of these components, overall external area (physical size of the entire finished chip) of real-world chips going from 5nm to 3nm is shrinking by about 1.3-1.4x or so, far cry from (very) old school 2x, never mind 2.8x that naming may suggest.
To make things even more complicated, the following is also true: long time ago the cost of the chip was practically proportional to its area almost regardless of the process node used, therefore, 2x smaller chip costed almost 2x less to produce. Not anymore. Now every new node is substantially more expensive per unit area to use, thus a smaller chip on a newer node ends up costing only marginally less - and in some instances, more - than a bigger (by area) chip on an older node.