Taken in a single breath group, "The boy being small" would normally be parsed as meaning "The fact that the boy is small", so it does not make sense in this case. (Some people insist on "The boy's being small" for this use).
So it would have to be read as though the participal phrase was a separate breath group: "The boy, being small, is the fastest" - careful writers would write the commas, to reflect the pause in speech before and after "being small".
However, as mattdm says, this means "The boy, who is small, is the fastest", which is not the same as "The boy who is small is the fastest".
The first, with the relative clause in a separate breath group (represented by the commas) has a non-restrictive or commenting relative clause - it is making an incidental observation about the boy, who must be identified in some other way. Without the pause "The boy who is small is the fastest" has a restrictive or defining, or identifying relative clause: it is identifying the boy by his smallness.
In summary: a relative clause can be restrictive or non-restrictive, the latter as a separate breath group. A participial phrase like "being small" may replace a non-restrictive relative clause, but not a restrictive one.