So the bigger shoe should allow the foot to spread more in that it should open up the heel and allow the foot to grow in a more natural direction. The flare this horse has is in the toe pillars, which were growing way over the shoes at 4 weeks. I would agree that this horse doesn’t seem to have flaring at the quarters (where flaring can be common), and he does probably need more room all around in conjunction with a better trim. Summary - larger shoes are probably a great idea!
Setting the shoe back can improve breakover but if they are set back under a too long toe, then the shoe is just kind of in the “normal” spot. This horse might need a set back or rockered toe but also needs some toe to come off. But the larger shoes might help somewhat with the hoof growing more in the right direction.