The Braisa says that a house that is less than 4x4 Amos is patur from Mezuzah among other things that a small house doesn't qualify for. The gemara says that although to connect 2 cities by being with 70 2/3 Amos even בורגנין which are little huts used for a night work to connect the two cities, a house less than 4 amos does not. The gemara explains הני חזי למילתייהו והני לא חזי למילתיה, the huts are completely functional for what they are meant for, whereas a house that is less than 4x4 is unfit for what it is meant for. The Rashash claims that this supports the opinion of the Chamudei Daniel in Hilchos Mezuza cited by the Pischei Teshuva who says that a בית שער that is less than 4x4 requires a mezuza since it is completely usable and functional for what it is meant to be used for. The Chamudei Daniel holds that only areas that are meant to have the full function of a room must be at least 4x4 amos to be obligated in mezuza, but rooms that have a specific use that does not demand those dimensions are obligated in mezuza regardless. The Rashash considers the gemara to be a proof to the chamudei daniel.
In my opinion there is no proof at all from this gemara to support the approach of the chamudei daniel. Within the list of items in the braisa that demand the house to be 4x4 amos, there are two sections. All the d'oraysa mitzvos such as mezuza, ma'akeh, tzara'as, returning from battle and redemption in a walled city are based on the technicality that the Torah uses the term בית, and less that 4x4 doesn't meet the technical definition of a בית. The other Halachos that are Eiruvin related are not contingent on the technicality of being called a בית, rather on the functionality of a בית דירה, and when it is less than 4x4 it isn't suitable for a בית דירה. Within the second group the gemara makes a distinction between a house and a hut in that a hut is fit for its purpose even when it is small. This sevara helps to give the hut which doesn't serve as a full בית דירה to nonetheless qualify as being suitable as a בית דירה. However, halachos that are contingent on the technicality of being called a בית, such as mezuza, even if they are suitable and functional, do not meet the standard definition of a בית, and are therefore patur from mezuza.