MTB geometry/fit is way different than road fit. In my experience, a MTB feels best when the seatpost (300mm) is almost to the minimum insertion point which puts me on 18" frames (BUT these are "newer" MTBs with sloping top tubes from the 1990s). I ride 22-23" road frames. If the photo of your bike is setup for you now, I would say the fit is fine.

I once tried riding a 16" MTB with a 400mm post and decided that I didn't like the fit and sold it.