Currently (DF50/Arrow 56.1), DataFusion's support for the smaller decimals variants is limited. I've opted to not convert our decimal dtype into arrow's decimal32/64, even if the precision allows that. Once #4577 merges, we should keep an eye out on DataFusion, and once they release better decimal support we can enable the missing pieces on our end.
I have a PR in arrow-rs and another in DataFusion (with a second coming soon) that should enable that.