@DatBoi 
Once you watch this video you'll understand more about Liquid Clustering 🙂

https://www.youtube.com/watch?v=5t6wX28JC_M&ab_channel=DeltaLake

Long story short:

I know Databricks recommends not partitioning on tables less than 1 TB and aim for 1 GB partitions. Does this hold true for liquid clustering?

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Clustering is a little bit different from partitioning. The main issue with partitioning tables less than 1TB is that it could create a lot of small files, that could negatively impact performance. With liquid clustering there's no such issue.

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And vice versa - will clustering on a small table < 1TB or even < 1GB hinder the performance of queries?

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From my experience - not really.