By the slackset do you mean the headset?
Yes, it slackens the headset by a couple of degrees which means you get the head angle equivalent to running 140 forks while I assume slightly steepening the seat angle and lowering the bottom bracket a tad. All in all it then makes for a very nice xc bike for everything bar racing. My 16″ frame weighed exactly 1500g with the dropouts.
One thing to be aware of is that not all rear brakes with 160mm rotors will fit the non drive side dropout which puts the calliper between seat and chainstay. I had to get another dropout which puts the calliper above the seatstay to fit Avid Elixr’s with 160mm rotor. If you’ve any doubt it would be worth checking to see if it can be supplied with the alternate dropout fitted.
I’ve fitted a 70mm stem and have a layback post with the saddle right forward. At some point I’ll change the layback for an inline post, but even as it is I don’t find it to stretched, though it must be said my wheels rarely leave the ground.