One doesn't even need to rectify the proportions to give halflings a 6 or 7 head ratio for them to look good, and like healthy, well-proportioned creatures. This *Can* be done quite well even with a ratio of 5, IF the rest of the body is proportioned in a way that makes sense for the creature. Current BG3 halflings have the proportion hallmarks of humans with a specific (and identifiable) type of dwarfism, and that's a problem - it legitimately is.
The halflings and other small races in other games that I've shown images from so far are examples of how you can have a small race character look healthy in their own body and still have non-human proportions, letting them look like their own species of creature - I'm going to see if I can't find some time to actually do the composites (head ratio, and the crown-hip-heel ratio as well), but I suspect that even if I draw them up formally what it will show is that those other halflings (and yes, even the black desert Shai, despite her cherubic facial structure), all maintain these ratios well, in a way that Larian's halfling, here, does not. I'll try to find the time to do some composites with markers for them - I'd like to draw up marked charts for Larian halflings, Larian humans, Lotro Hobbits, Lotro River-Hobbits, Lotro Humans, BDO Shai and BDO humans, ideally with male and female examples on the small race side - though with the Shai this isn't possible (the playable characters in that game are specific people with specific backstories - so the Shai that has gone adventuring is a specific, female, person). If there are other games or media that have examples of halflings or equivalent small-race characters done well, let me know and I'll see if I can't do them too.