Dan Guzman shows that setting TVP column sizes correctly can have a major performance impact:
LOB values are especially problematic when a trace captures the RPC completed event of a TVP query. Tracing uses memory from the OBJECTSTORE_LBSS memory pool to build trace records that contain TVP LOB values. From my observations of the sys.dm_os_memory_clerks DMV, each LOB cell of a TVP requires about 8K during tracing regardless of the actual value length. This memory adds up very quickly when many rows and lob columns are passed via a TVP with a trace running. For example, the 10,000 row TVP with 10 LOB columns used in the earlier test required over 800MB memory for a single trace record. Consider that a large number of TVP LOB cells and/or concurrent TVP queries can cause queries to fail with insufficient memory errors. In extreme cases, the entire instance can become unstable and even crash under due to tracing of TVP queries.
This is a must-read if you use TVPs in your environment.