Micromasters were cheap and fun toys to collect and play with!![]()
Storywise they always used good old mass shifting -- their vehicle modes were regular sized, but then they transformed into slightly-taller than human robots.
And this appeared to be the case in both Anglophone and Japanese continuities.
The reality was that there was a recession in the late 1980s/early 90s and a lot of people were downsizing toys. Galoob released the popular Micromachines, so Hasbro followed suit with Micromasters; fun and affordable. As for the garish colours... it was leading into the early 1990s man. Look at the toys that came after and in G2 (and G.I. Joe) -- MUCH more garish!
Yeah, they did that with the Arms Micron repaints (e.g. Fracas, Aimless etc.) which did make them look a bit better, but they were still accessoryformers with not much play value. When I got Fracas, for ages I barely touched it until after I finally got Generations Scourge! But without Scourge, he's a really dull toy. I have Aimless, but there's no Classicsverse or Prime Misfire to go with him, so to me he's still a really dull toy! Just as well these toys were freebies (w/ TF purchases)... cos I wouldn't pay to have any of them on their own.