Oversize is not necessarily the length, but the overall dimensions/size and then it depends on where it's going.
It doesn't matter if you print postage on Etsy, Paypal, USPS or go to the USPS counter, certain box sizes are considered oversize to some zips.
A good example, I had an order last week (from my website) and when I went to Paypal to print the postage label, I put in my box size of 13x13x13...it came up $10 more postage than what I'd figured.
So I changed the size to 12x12x12 and the postage came up exactly what I had figured.
So I found me a slightly smaller box.
This order went to OR.
Just 1" made a difference, I also tried 13x13x12 and 13x12x12 and all came up more postage than I'd figured but the 12x12x12 did not.
But that same order if it was going to OH would NOT have been considered oversize and would have been the same postage cost, if a 13x13x13 or a 12x12x12.
Seems locations close to you the box size doesn't matter as much unless it is really big but for locations across the country 1" can make a difference in the postage cost and whether it is oversize or not.
If the OP is selling a lot of oversize items and using CS, then she needs to have her item sizes and custom box sizes to accomdate an oversize box so the Etsy calculator will figure for an oversize box depending where the buyer is..
If she is using NON CS, then she needs to go to usps.com and put in the weight and package size of her items and different zips to see the differences in cost if she is charging a flat rate for everyone.
That way she can put in the most expensive to cover everyone and the size of packages she is mailing.
Hope this helps.