I was thinking that weapons/armor don't change size with the character, hence two-handed weapons being wieldable in one hand by giant size and up, but not by human size, regardless of actual race (reduced giant still can't wield in one hand).

The way I saw it, certain gear would be too small to be used by human size and up, but gnome or reduce gnome size would be fine and same in reverse for giant+ gear. Armor doesn't change size, but is too big/small to be used by certain sizes. Your way makes sense too, I'm just clarifying what I was imagining for no real reason.