Yes this is possible. Less code can mean the executable shrinks.
Compiled code is generally pretty compact, so a non-trivial amount of code would need to be removed for the difference to be noticeable.
Refactoring or simplifying code has a tendancy to involve removal and this will cause the executable to shrink a bit. This can happen in an update to the game systems. An entire mechanic could be found to be broken and is subsequently removed from the game. Although a lot of game logic is handled by a server, some clients will run a large subset of the same code for prediction purposes, so a removal of that server code would mean a removal of client code as well.
Another more practical possibility is replacing a dependency. For instance, someone might use one or more parts of the boost library at first but later find a better replacement for the features they were using. Another example would be switching serialization libraries for performance reasons, but the new one they choose happens to have a smaller binary size.