Thanks, with parted from that link and TWRP as given by @-Alf- I have resized system and am now on the way to flash this ROM.I was able to overcome this issue with a tool called parted. I increased the system partition to about 3.5 GB and flashed the system image.
This is a step by step guide showing how to resize partitions on an android phone using Parted. This guide will come in handy if you're trying to reduce the size of a partition e.g system partition anforum.hovatek.com
Edit: unfortunately, the first tries are dis-encouraging, even the GSIs that worked previously now fail to boot and drop into fastboot. I'll see if flashing from erecovery won't reset partition sizes and will let me boot again.