Opus itself doesn't know anything about AlbumArtSmall.jpg, and doesn't use that for folder thumbnails if I just create a file with that name and put it in a directory (even one full of music).
I don't know of a way to specify that a directory uses a custom JPG (i.e. not folder.jpg or coverart.jpg) for its thumbnail other than the Properties dialog's Customize tab or the cde_thumb_coverart_file setting that Steje mentioned.
Did you check the Properties dialog as well as that setting?