Don't worry. This is not a red flag.
In a 700 square foot apartment, the percentage of the home for business use will be greater than a home office in a larger home.
Line 2 of form 8829 reporting the Business of Home Office shows the total area of your home. This allows the IRS to see why your percentage is higher than other taxpayers may claim.
For more information, follow these links:
https://www.irs.gov/pub/irs-pdf/f8829.pdf
Business Use of Home Office
