Great question. Answer is that it depends on the dog. I definitely wouldn't put a Sheltie on one side or another just cuz of their breed or size.
I tried Koji in the smalls, um, he towers over them at almost 18". LOL. And he was playing pretty rough with them too. So, I told them and they agreed to put him in the bigs to see how he'd do. First day, he was SCARED!!! lol. Second day, my trainer (she also runs the daycare) went in with him and he did great. He LOVES LOVES LOVES running with the big dogs.
Now, when Miko was young and we'd go to the dog park, he'd "run" with the big dogs. Notice I said "run" and not "play". As we know, Shelties don't always know how to "play". Now days, Miko goes in with the small dogs because they won't run him over if he's trying to lay quietly or walk around.
I haven't seen/heard of Koji getting ran over, however, my daycare, seriously, is HUGE!!! Oh yeah, I also like the bigs because it's got so much room for Koji to run around! Not so much room to run in the smalls.
I say, whatever works for your dog.
ETA: Also, are there trained personnel in the rooms with the dogs? I'd like to say, because this isn't a regular daycare type thing, that maybe smalls is the safest place. I mean, my daycare staff knows my dog and most of the dogs in the room with them (and there are minimum 2 in there at a time). So, that's a little different than a "doggie night". Which btw, is pretty cool for socialization. Just be careful. Keep an eye on your dog if you can.