No it doesnt reduce the image. You CAN reduce it, or enlarge it for that matter. I have reduced some 1/32 aircraft decals down to 1/48 in the past.
I use the scan/print method to make new decals for some of my Aurora planes. I have to use the kit decals for those becuause the markings are usually unique, fit the box size, and also have to fit the molded decal shapes on the airplane kit. So I scan the yellowed, cracked, old kit decals, clean them up in Paint Shop or Gimp, and reprint them. Works perfectly.