Yes, it is cruelty. The shoal has to have 10+ (numbers are arbitrary and providing a minimum is always not the best, but...) and that means at least a 30g tank (30 inches/75cm length).
The issue here is the stress that only having five fish and not ten causes the fish so affected. This particular cause of stress certainly would not occur in the wild as the fish have a shoal of dozens if not hundreds.
The growth size of the fish does not even enter the discussion, we are talking about providing sufficient numbers of the species, and sufficient space for that number. This is a relevant issue for all shoaling fish [fish that as a species lives in groups and must be in groups in an aquarium]. And for the record, they are not my theories, they are proven facts after years of study of the species by those trained to carry it out.
Humans rely on specific individuals who have spent years studying medicine, dentistry, disease, etc, to provide help in these areas when it is needed. There are biologists and ichthyologists who have spent years studying fish physiology and metabolism. It is as foolish to ignore their findings as it would be to ignore the wisdom of your doctor, dentist, etc.