Can I just talk about this for a second?
This little four year old girl is the spiritual representation of a seventeen year old who’s grown up believing herself to be defined entirely by an impersonal role. Because of that, her Self has never aged past the point at which she learned of that identity, and she acts accordingly. She could kind of fake it in the material world, of course — pretend to be fearless, use violence as an effective shield, wear a mask to appear as a fully-developed adult (if a rather dysfunctional one) — but it doesn’t work in the Spirit World, because in the Spirit World, your emotional state is your reality.
In the Spirit World, when she tries to use violence as a shield, she hurts harmless spirits that don’t deserve it (the baby dragon-bird) and enrages the powerful spirits against whom she herself is powerless. Pretending to be fearless doesn’t work all that well, either.
It’s only when she realizes that she’s valuable, that she has something to offer of her own that makes her special — “I have light inside of me” — that she’s able to get the spirits to back off and transform them back into their proper light selves.
That moment of realization in the last panel there is so incredibly important to Korra’s growth, and I just want to wrap my arms around her and give her a hug for finally figuring it out. She — Korra — has light inside of her. She’s valuable, she’s worthy, she can help, and it’s not because she’s the Avatar, but because she’s Korra. And, when she makes it up the mountain and places the dragon-bird in its nest where it belongs, proving herself as Korra, she reverts to her own proper age, because she’s now ready to be her own adult self instead of a spiritually-stunted permanent child.
(If Tarrlok and Noatak were to visit the Spirit World, they’d have both turned into children, too… and I’d say it’d be quite likely for spirit!Noatak to be younger than spirit!Tarrlok)