I upgraded my 2TB to 4TB 2,5" and I really enjoy the reduced noise and much shorter spin-up time. Should have done long ago.
Time traveller from the future here, I did something similar. Bought a 5TB portable Seagate Expansion and shucked it for the 2.5" drive inside for my 5th gen Time Capsule.
Spin-up time is much shorter, with the 3.5" drive it would previously take 15-20 seconds before the drive was ready, now it's 5-7 seconds.
Noise is also significantly reduced, the 3.5" drive would audibly spin up and I could hear it from across the room, now it's almost silent unless I put my ears next to the Time Capsule.
Transfer speeds have dropped a little but that's to be expected since the 5TB drive is 5400RPM as opposed to the 7200RPM 3.5" drive. With the original drive I was getting 38.4MB/s write and 51.5MB/s read while with the 2.5" drive I'm now getting 33.6MB/s write and 41.2MB/s read. This was tested using BlackMagic Disk Speed Test with a 2GB test load over Gigabit Ethernet, speeds were a little slower on 5GHz Wi-Fi and a lot slower on 2.4GHz. For smaller file transfers, the difference in speed is actually completely offset by the much faster spin-up time so overall it's still faster.