He puts on a thoughtful expression. There are a couple of reason he could state. After a couple of seconds Tyrion replies "Old habit of making myself smaller than I am."

The hint of a smile plays around his lips. He is fully aware of the intended double meaning of this statement but years of doing dutiful work and not getting the least bit of praise had left their scars.

"I'm not lying when I say that I'm flattered that you seem to think otherwise, Mylady. I guess that is the right way to address you?"