Depends on place, time, presence of competition and how long since a major extinction event, and what else is around. Enough big prey animals to support sustainable groups of large predators, not enough major apex predators around to limit herbivore size etc.

Most extinction events hit the large species harder because they need more food to sustain their bodies, and a major hit to their diet goes very badly. In the time after though, after whatever went wrong is over or stabilized to a new normal, some of the smaller species start to grow to fill the gap left behind.

One reason for a marine animal to get bigger is insulation. Even warm water can draw heat from a body. It makes it easier to regulate your own body temperature and that means you can stay in the water for longer and travel further, and may reach harder to access food sources.

The time for giant penguins was between 60-23 million years ago. There were more than this one species. But they all died out.

Their fall coincides with the diversification of dolphins who might have competed for the same spot in terms of diet and size and they were much better at it, or they may have acted as predators to the penguins. Or both.

As for place several of these giant penguin species have been found in or near new Zealand. At their time there was also the Zealandia continent, which since around 23 million years ago is almost completely submerged. Besides new Zealand itself and some islands poking out. But for many millions of years there was more land, and as it sunk it brought nutrients that could support rich fishing grounds, but not low enough to make it very passable for major marine animals that couldn't go in shallow waters. Which could have made a very roomy and rich niche for something like a penguin. Until it sank even further down. And that is when dolphins and whales hit their stride in this region.