It doesn't have to implement _all_ the standards, just a subset that is compatible with the full set. So that if you can develop an app within that subset and have it working in other browsers. But not necessarily vice versa.
Electron also compresses well but people complain about unpacked size, too. You're likely not going to see an embedded browser actually smaller unless you can disable features at compile time.
Doesn't look like it but if Servo wants to be a production-ready browser they will likely need to do the same. Better security and reliability having processes handling different roles.
It doesn't have to implement _all_ the standards, just a subset that is compatible with the full set. So that if you can develop an app within that subset and have it working in other browsers. But not necessarily vice versa.