Lady Shay was out to smother and crush this guy into submission. He did not want to do it and she was not going to beg him. So she did what she does best and she forced him to do what she wanted which was to smother him into a little man. He had never experienced that and he was humiliated and in a lot of pain. But the point was home and the lesson was learned.
Lady Shay has giantess powers but her slave did not know. And he misbehaved thinking that she could not do anything about it. But he was shocked when she turned out to dominate him and she used her giantess fetish, which he knew nothing about, to dominate and humiliate him. And she told him that was just a taste of it. The real punishment would come if he did not toe the line.
Lady Shay used her giantess prowess to turn this loser into a tiny man. She did not care about what he felt and how scared shitless he was. All that mattered to her was the fact that she wanted him to quit being a bully and she was willing to do anything to achieve that. She got what she wanted when he got a taste of what she was capable of.