Mechanical trail is still not well understood? It's the distance between the steering axis and the tyre ground contact point. So a larger wheeled bike is a greater distance. But a lot of trail also makes for increased wheel flop. I think there is a bit more to it than this. Maybe this is a factor for very small wheeled bikes and in my experience there is a big difference between 2o inch and 16 inch wheels.
There are other aspects like rear wheel caster effect, (long wheel base).
On a brompton I feel the unstability is due to the lack of stem extention. Extend the bars on a bromptom. By lowering bars and extending them 9 inches(see my threads)and it's the best handling 16 inch bike I have ever ridden. Do the same on a short wheeled mezzo with an already extended stem and it's very wobbly indeed.
Simple answers rarely work.
I believe the truth is that often small wheeled bikes are not optimised for handling in their design. Brompton is a good case in point. It's so much better with more stem reach, but it's designed to fold with out any. The folding aspect dictates.
Moultons are very stable at silly speeds, they are optimised for handling.