Use a second voice for the small, downstem notes of your second stanza and then be sure to choose that voice (only) to assign (just) the syllables they apply to ("understand the").

No, that won't work. Anytime you reduce the size of the notes, the lyrics will also be reduced in size.

The solution is to enter notes for "understand" in verse 3 for example. Enter the lyrics, then hide the notes, the lyrics will remain. Then in layer 2 input the notes you want displayed in a reduced size, but don't attach lyrics to them.

… Anytime you reduce the size of the notes, the lyrics will also be reduced in size …

True, but …

if you instead resize the noteheads, the lyrics will not be reduced in size.

To do so, use the Resize Tool, and context-click the notehead.

In the context menu, choose

Resize Notehead…

Why would you use full size stems on reduced noteheads? The image that the OP posted clearly shows shorter stems. I guess you could use special tools to shorten the stem length manually. It's good to have choices.

Of course one can also use Fixed Size for all the lyrics to keep them the same. It probably isn't a good idea to have staff and system sizes changing radically enough throughout the composition to make establishing a fixed size for lyrics problematic; and if it is, one can copy those lyrics into a different Verse/Section and adjust size accordingly.

But yes, one must allow for the smaller notes otherwise affecting the font size.