Earlier quoted context omitted.
I would argue that a microkernel would be a good fit because: "Traditional operating system functions, such as device drivers, protocol stacks and file systems, are typically removed from the microkernel itself and are instead run in user space." - https://en.wikipedia.org/wiki/Microkernel You want to throw out as many functionality as possible to get your kernel down in size to fit into e.g. 1 MiB of memory.
Those operating system functions still need to exist and still consume RAM. It doesn't matter whether they run in userspace or kernel space. If you don't need those functions, you can remove them from kernel space in a monolithic kernel. It's possible to build Linux without TCP/IP support and with no on-disk filesystems.
They achieved a compressed linux kernel size of just 749 kB which additionally requires at least 12 MB of RAM to boot. This is very impressive, but there a constrained systems with 1 MB or less of memory.