To make a LMS Test.Lab project smaller, you must also compress the project after deleting runs.
Choose "File -> Save As..." from the main LMS Test.Lab menu. At the bottom of the dialog box there is a "Compress project" option. Click this 'on' and save the project.
If there was a lot of data, the save may take a while. After saving, the LMS Test.Lab project (*.lms) should be smaller.