You're right that a decrease in code size doesn't mean a performance increase (and oftentimes they can be inversely correlated like in inlining).

But LLVM targets both depending upon what optimization pipeline you select. (-Oz/-Os are targeting minimum code size, -O1,-O2,-O3 are optimization focussed).

Code size reduction is critical in some use cases like embedded environments and mobile apps and it is a significant area of research.