Why does this small corridor look like a huge room on the map?

As you can see on the mini-map this is a large room, but as you can see on the screen it's just a small empty corridor. Any ideas? I can't see any dwarfism entrances.

Whenever a room occupies a larger space than that which you can see, there is usually something hidden nearby. You may be able to pass through at a certain point in the floor, go through a wall or the roof may have holes in it. Places you can pass through are sometimes painted with a slightly darker color than the surrounding edges. To check the floor, attempt to jump down through it like you would a thin platform by pressing down and jump. Often treasure and fairy chests can be found at the end of a labyrinth of hidden passages.

Sometimes you encounter a room where monsters will be present in unreachable areas but able to attack you. These can sometimes be the objective of a fairy chest and you need to kill them using spells.

Finally that room may be a room whose purpose is to connect other rooms together by passages but in this case no other rooms were placed on the other sides of that room, resulting in a terminated connector room. This could be the case if you can't jump into the walls anywhere and there are no chests or enemies present.

I've encountered these rooms several times; while I don't know exactly what causes them in the world gen, they seem to be a "corridor" room which can dynamically generate whatever connections it needs. In this case, the corridor room was generated, but nothing was connected to it except the one side. You'll often find similar rooms that pass through to the other side, or have passageways up or down, or even a full 4-directional pathway.