If Diminutive Size is meant to be required for every hive mind, then it should probably be an explicit Must.
Cutting down on the number of bodies helps, but the Power still has some weird interactions. For example, it lets you have 29 bodies hiding in a bunker, concentrating on the action of 3 bodies to make those bodies badass fighters. Then if someone takes down a body, you can send in another one.
I have another idea for handling this. It's based on your idea, but it goes a little farther.
HIVE MIND [-2]
Description: You are not a single entity. You have one mind, and many bodies.
Skills Affected: Many.
Effects:
Ten Bodies. You have ten bodies. You may divide them into groups however you like. Each group is considered a single character, and receives a single action in a conflict. If there are less than 10 bodies in a group, that group takes a -1 penalty to all physical or social rolls for each 2 members missing from it. Knowledge rolls, Resources rolls, and Contacts rolls are unaffected by this...you can only take a normal number of them, but they're not penalized.
Altered Stress Tracks. Each group has its own physical stress track, but you only have one mental stress track total. Social stress should be handled on a case-by-case basis by the GM. You have only one set of consequences. For every three bodies in a group, that group gets a point of stacking physical armour against single-target attacks. Groups fight at full effectiveness until taken out, even if you decide to narrate a consequence as having a group member knocked out or something like that. When combining or dividing groups, the resulting groups have as much stress as every group that they got members from put together. If this would take it out, you can't create that group.
Mental Link. If one of your bodies is more than a mile away from all of your other bodies, it falls unconscious.
It's far from perfect, but it's something.
Dunno how exactly to handle more bodies.
I considered adding some kind of bonus physical consequence where you sacrifice bodies to absorb stress, but I couldn't think of a good way to handle it. I still think it's a good idea, I just don't know exactly how to go about it.