It is designed to pick a close match, preferring the next larger icon if an exact match is not available. For instance, my DPI is set to 125%, therefore the "small icon size" is 20x20, and the icon loading procedure will prefer to downscale a 32x32 icon over upscaling a 16x16 one. I have confirmed that it still behaves as intended in v1.1.33.00, selecting the 32x32 icon even though 48x48, 96x96 and 256x256 icons precede it.
One thing that did change: if a 256x256 icon is considered the best match (because the next size down is too small), it will be selected. This never happened in previous versions, because the icon size fields actually contain 0 (being 8-bit integers, they cannot contain 256).
If you have a problem, post files that demonstrate it.