It ought to run fine with a 1/8" venturi.
I've got a Super Tiger .35 Stunt engine that uses a 1/8" venturi...[.just to illustrate a point about how much power a 1/8" orifice can support.]
5/32"+ is a big jump in total area...it might even match the hole size that passes through the crank, which doesn't give much of a pressure drop at the spray bar.
The smaller [1/8"] orifice will decrease the chances of having a lean run and it ought to make the engine less sensitive to fuel level in the tank.