Biomedical image segmentation is central to medical image analysis, but practical deployment often faces limited annotations, memory constraints, and cross-site distribution shifts. Implicit Neural Representations (INRs) have recently emerged as a lightweight alternative for semantic segmentation, achieving competitive performance with substantially fewer parameters than conventional architectures. However, the mechanisms, scaling behavior, and domain generalization abilities of INR-based segmentation remain insufficiently understood. In this work, we study these questions in the context of cross-domain brain MRI segmentation. We analyze INR-based segmentation across low-parameter regimes, comparing it with conventional pipelines in both in-domain and out-of-domain settings. Surprisingly, we find that INR-based models do not simply improve with increasing parameter budget. Their advantage is most pronounced under low-parameter and limited-augmentation settings, while U-Net-based models benefit more from larger capacity and standard augmentation. We also investigate how INRs encode semantic information in their hidden features and show that complementary segmentation-relevant structure is distributed across multiple INR layers. Building on this insight, we introduce HierINRSeg, a hierarchical INR-based architecture that aggregates multi-layer representations for improved robustness and generalization. Extensive experiments show that HierINRSeg consistently outperforms MetaSeg, a strong recent INR-based segmentation baseline, with an average improvement of 5.6 percentage points in Dice for the in-domain test set and 8.2 percentage points out-of-domain. Overall, our analysis identifies the conditions under which INR-based segmentation is most effective, providing concrete guidance for model selection and future research.

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