It looks like there's a css class controlling the width. .bx--overflow-menu-options has width:10rem;

swapping that to fit-content fixes it:

You can handle this by adding a link to a css file in the spec.json

And in your css file you can add
.popover.bx--overflow-menu-options{
width:fit-content !important;
}
Republish the extension and it should look fine.

------------------------------
Paul Mendelson
------------------------------