For example, pretend that some S&P 600 corporation succeeds and profits, like some biotech discovers multiple cures to disease like cancer. Assume that its market capitalization then skyrockets enough that it becomes a large cap and joins the S&P 400 or S&P 500.
Wouldn't it join either of the larger S&P indices? Are there reasons that it'd choose to remain S&P 600?
If so, then this former small cap has become a large cap. So how can small caps historically outperform large caps after recessions?