Questions & Answers about Zmechacenie jest małe.
It is a noun, and here it is the subject of the sentence.
More specifically, zmechacenie is a neuter singular noun. Nouns ending in -enie are very often neuter in Polish. This type of noun often names a process, result, or state, so zmechacenie refers to the state/result of fabric becoming pilled or fuzzy.
Because adjectives in Polish must agree with the noun they describe in gender, number, and case.
The noun zmechacenie is neuter singular, so the adjective must also be neuter singular:
So Zmechacenie jest małe is grammatically matched.