Once again thanks for all these additional information, and also thanks for the waiting.
First of all sorry to see that the person who had this cyst unfortunately was met with a fatal outcome.
Coming to the discussion;
There is no exact cut off value or cut off number that grades the arachnoid cyst size as small or large; rather whether the cyst is dangerous or not mainly depends upon the following 2 criteria;
1) Whether the cyst produces any major or severe symptoms or not
2) Whether the cyst is located in a crucial or sensitive area of the brain or not
A 5 cm size arachnoid cyst is generally considered as a large cyst considering that there is no much extra space inside the skull cavity. However it is not just the size, but the location of the cyst counts too. For example the person who you mentioned had it in a very crucial or sensitive area of the brain, that is in the lower brain stem/foramen magnum area and it was also displacing the cerebellar tonsils. These areas of the brain are very sensitive areas because vital centers like breathing, heart, blood pressure maintenance are all located in the lower brain stem area. When the cyst was compressing the cerebellear tonsils and displacing them it must have compressed the near by vital centers in the lower brain stem and caused these catastrophic fatal outcome, along with seizures.
Once again to your main question, yes the cyst you mentioned was a dangerous one since it was displacing the cerebellar tonsils and it must have been the cause for the fatal outcome in this patient along with the seizure. And about the size, there is no exact number or value which differentiates a benign from a serious cyst, however a 5 cm cyst is considered relatively large, and also factors like the location of the cyst and whether the cyst compresses the neighbor brain structures are important too; and in this case unfortunately it was located in a very sensitive area of the brain (lower brainstem area) and was most likely the culprit for the fatal outcome, due to its location in the very near vicinity of the vital centers that are located in the lower brainstem.
So if this cyst was identified before patient developed serious complications then it should have been treated at the earliest and such treatment (surgical removal or decompression of the cyst) would have probably prevented the complications. Of course an important point to make is this cyst was located in a very sensitive area and surgery in that area is very difficult because during surgery accidental damage to the brain stem vital centers can occur, however surgery should have been strongly considered for a 5 cm size arachnoid cyst that was compressing the cerebellar tonsils and was enlarging the foramen magnum (provided it was identified in time).
The above are my opinions regarding the management of the arachnoid cyst you described and please ask me if there are any further questions.
And once again thanks for the waiting!