It's not so much incorrect as it is redundant. When is already present in the introductory clause. When running, it is smallest in size.
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DeanbushIt's at its smallest size when I'm running. It's at its smallest size when she is running. Etc. You must name a subject that is running. Otherwise, it's not correct.If the subject is a bug or an animal, the first clause isn't dangling. This is why I asked what was running.