Hi,
I'm currently using 16% on my Nova Top 1/8 scale engine. But I would like to try 25%.
What I'm concerned about is that if the piston diameter has already been fixed to fit the sleeve for 16% fuel, when I changed it to 25%, the piston wouldn't fit tight to sleeve anymore. My understanding is higher the fuel content, the less the piston would travel upward before combustion.
I understand I would need to break in again and all but just worrying that 25% fuel wouldn't do any good. Please advise,

Your engines stroke is not a variable number. Increasing nitro content won't change anything in the engine buy you may want to increase head clearance and run a cooler heatrange plug. This won't change the distance the piston travels in its sleeve but will change compression ratio with more or less head clearance to suit the fuel.
Obviously repeat the runin process with the new fuel.

Add a .1mm shim and run a 1/2 tank and check the for detonation on the top of the piston.

If you hadn't removed shims, what bluer said. higher the % of nitro you add shims. It also changes it timing. Don't really know what you mean a tighter fitted piston/sleeve. It gets looser when broken in. Retune engine.

The only setting determing the nitro content is the headplay and that is the distance of the piston at top dead center (TDC) to the edge of the combustion chamber. It is determed by an amount of shims.