I think there would be more chance of ingestion with a smaller piece myself, but personally I have never had an issue with Cyprus mulch. I also haven't seen it stick to rats like Aspen does; that being said, I have never had mine ingest substrate (that I've actually witnessed), nor have I had it cause impaction or anything like that. Maybe someone else can speak up about experience with that
I really do not think you need to do anything with the mulch, though. It should be fine just the way it is. Sometimes people prefer to dry it out, others spritz it once in awhile (all dependent on what humidity is needed in the vive), but I haven't personally heard of anyone grinding it up finer.
All the best!