It appears that Racial Size, Two-Weapon Fighting, and Weapon Finesse do not check a weapon's size value to determine their functionality. They instead seem to go by a specific list of weapons.
So, to get this to work correctly, those Feats must be altered to check the Weapon Size column of the baseitems.2da rather than whatever it is they currently go by.
***Does Not Currently Work***
This is a simple alteration that changes the Mithral Melee weapons to be one size smaller than they normally are.
This allows small races to use Mithral versions of larger weapons, as well as offers more options for duel-wielders.
10 - A Masterpiece, Genuinely Groundbreaking 9 - Outstanding, a Must Have 8 - Excellent, Recommended to Anyone 7 - Very Good, Deserves a Look 6 - Good, Qualified Recommendation 5 - Fair, Solid yet Unremarkable 4 - Some Merit, Requires Improvements 3 - Poor Execution, Potential Unrealized 2 - Very Little Appeal 1 - Not Recommended to Anyone