The way an air layer works is you break the downward flow but leave the upward flow.
In general (it's not this simple...but let's pretend
), the sapwood carries water up and the cambium carries sugars and auxins down. When air layering, we remove the cambium so the sugars and auxins run out of "down" to go. If enough auxins accumulate...and there is meristem present...the cut will callous and begin to grow roots. The sapwood is not cut. This allows water to still move up to hydrate the foliage.
If the branch is too thin, air layering effectively becomes "cutting still attached to the tree". The camiums still gone...but there's not a lot of sapwood in a tiny branch to draw water up. At that point, you're better off just doing a cutting which you can move to a more controlled environment and provide high enough humidity the foliage can't transpire all its water away.
Air layers are generally thicker than cuttings...again...simplifying. On the upper end, there is a max thickness that will layer in practice. It's pretty species dependent. To begin to grow root where none existed before, the tree needs meristem: undifferentiated tissue. Tissue that has already specialized doesn't readily change specialties. The younger the tree/branch is, the more likely it retains enough non-specialized tissue to start making roots.
All that said, trident and redwoods both grow fast enough that it's easier and more efficient to start from seed than cuttings or layers. For $10 you could have yourself a forest of tridents this size in 2 years. Cuttings are good when you have a cultivar you want that won't produce true from seed or seed has low germination rates or is hard to find. Layers are good when you have a gnarly old branch that looks cool and/or would save you 5 or more years of growing out.
I'm not saying don't do it...just think through where you want to get toand which options are available to get there