I’m building a service to be used by a CustomSelector that returns a list which includes a thumbnail. The thumbnail seems to be limited to 32px in size, which is not optimal for our case. Is it possible to increase the size of thumbnail, e.g. to make it look like the list presented in ImageSelector?
Thumbnail size in Custom and Content selectors is limited to preserve layout of the dropdown. What you are basically asking about is alternative layout mode in the Custom selector dropdown, like the one in Image selector. This is doable, but this is a new feature - so I’m moving this issue to Feature requests.
How’s the work on this feature going? 
No big news on this feature, unfortunately.
We are in the process of migrating away from the 3rd party library (SlickGrid) which was used in all of the grid/list components, including selectors. So all of the tasks related to grids and/or selectors have been deliberately put on hold until this work is completed.
Now that we are almost done with that, we can start planning a new iteration of CustomSelector improvements, which include the gallery mode, additional context on selector items and being able to open selected item for edit.