After coming to terms with the existence of witches and magic, and fuming over the attack on John, Sherlock would research his brains out trying to find a way to fix his flatmate.
In the meantime, their relationship would remain the same. Sherlock would see no reason to treat John any differently just because he changed sizes, though his protective side will certainly show. John will be safe, and the most he’ll have to worry about is how portable he is now. Sherlock can and would easily pluck up his tiny doctor and carry him along wherever he’s going. Poor John might have to fight for a bit of independence, but that’s about it.
And John will definitely find some creative way to defend himself, just in case he and Sherlock are separated.