I think I found the issue. This could be a bug.....

In the Global Properties of K2 there is a property named "Commenter image (avatar) width (in px)"

It looks like when adding an image to an Item, K2 uses this property for the _XS file rather than using "Item XSmall image width (in px)"

I have confirmed this is the issue by deleting the image from the item, putting 2 different values in the 2 properties and then add an image. The smaller image was created with the size defined in "Commenter image (avatar) width (in px)"