White can certainly help a small room feel more open, but it isn't simply because "white makes spaces bigger". What matters is how much visual interruption there is across the walls.
A light tiled surface can reflect available light and reduce the contrast between different parts of the room, helping the space feel more continuous. This can be especially effective in smaller bathrooms where there are already lots of separate elements — sanitaryware, mirrors, glass and fittings.
But the finish matters. Gloss white wall tiles will reflect more light and can create a brighter, livelier surface, whereas matt white gives a softer and more subdued result. A textured white introduces yet another layer, allowing shadows and surface relief to create interest without adding another colour.
So if you're choosing white for a small room, think beyond the colour itself. The way the tile handles light can be just as important as the fact that it is white.