The height listed for the inner tent of the Nallo 2 is 40 in, isn’t that a bit low?

The inner height of 40” is tall enough for most people to sit up. A tunnel design makes the most out of the height and volume available since you can use nearly all of that height. Many dome or geodesic tents only have a corner or peak as the stated highest point but the actual “useable” height is often lower.