It's a design issue, not a tunnel size issue. Look at all these interior details, not to mention a completely identical exterior. It's the rolling stock from the freaking past. Obviously there were so many cost-cutting measures (or somebody just pocketed all the money) that they took the original design, which was pretty cool half a decade ago, and just slapped an air conditioner on top of it. That's it, dude. That's everything we've got. What should have been done is a complete redesign of the car, and then they'd be able to figure out how to put all the A/C ducts without having to do all this windows crap. Hell, it's 2023. The age of rockets landing backwards. We should be having panoramic windows in these carts by now.
That is absolutely not it but sure, go off. The article covers improvements to various systems e.g. braking, wider doors, a fully walk-through carriage (consider how an end wall affects crashworthiness), additional headroom, as well as room for 10% more ridership capacity (bodies have to fit somewhere).
Moreover, there's something to be said about consistency of design when it comes to maintenance familiarity and parts interoperability. Consistent design language also tends to happen when you are catering to disability accessibility requirements and providing clear user interfaces for passengers (including those with disabilities, or those who do not speak English).
Lastly, expecting a complete redesign is committing to an astronomical amount of expense relative to even using just some of the old design DNA. However, I'm not even convinced they've just reused an old design. For starters, a different company did these (Siemens vs Bombardier) and secondly I'd bet that there's a whole lot of difference under the skin that is masked by the natural convergence of design appearance driven by the multitude of requirements set forth by TfL - everything from the design language mentioned above, to their access/egress requirements, fire safety, lighting, etc. etc. There's only so much money governments are willing to throw at figuring out how to skin that cat before it's just not worth it.
What do you expect to see out of these panoramic windows? The Piccadilly line is hardly the most scenic route in the UK; there's nothing to see but tunnel walls for more than half of the full line. I'm not arguing against panoramic windows if they're easily installed, but that seems to me like it should be a substantially lower priority than air conditioning on the deeper Underground lines.
Can you link to the Munich or Amsterdam metro trains? I just see fairly ordinary metro trains for a system with normal-size tunnels. The design is irrelevant to the small tunnels of the Piccadilly Line.
A better comparison is with the Circle/District/etc lines. Those trains are of similar size to the Dutch and German ones, although I think they are designed to carry a lot more people so there are fewer seats:
