Any size you want.

Below is picture of tile in this bathtub now, it’s coming out. What size would fit in the posted dimensions that would avoid a line of small cut tile?

A 12" high tile would allow for a cut at the bottom to suit unlevel tub, and a small cut at top. Not all 12" tile lay up exactly 12", so you'd have to verify. You'd also have to make sure the tile you choose is suitable for thin joints and whatever coursing you plan. The tile you have now is in staggered brick coursing. Some tiles are not suitable for that coursing. A good tile supplier can advise you.

Are you ripping out brand new tile to hide that cut at the top? Yikes. Add a layer of 1/2” Sheetrock.

A good tiler can make ANY size work. It is relatively simple math to figure out the cuts, so you do not end up with ceiling slivers. Just use some polyurethane crown molding around the room to hide that, and move on with your life. If you waterproofed the walls correctly.