I have not found any canonical references that detail Brainiac's city-shrinking technology, but I suspect it functions similarly to other shrinking technology detailed in the DC universe.
If Brainiac managed to shrink the Fortress of Solitude while the City of Kandor was bottled within, would the City of Kandor shrink any further? Or, is it assumed to be already compressed to its minimum size?
In the latter case, what would happen if Brainiac attempted to shrink the Fortress? Are there any canonical or speculative analyses of this paradox?