Nop my EC area hasn't shrunk and yes I also have this white build up line sometimes when I wake up, rather a whitish stuff near my corners, surely the same thing. I guess, given that it's on our inner lips, it can probably sticks with teeth.
You said that it can be chronic chapped lips, but also added that lips can't heal properly, which doesn't tallies. I mean if it's chronic chapped lips all along the year, it wouldn't be 'chapped lips' for me. Also, we don't suffer from any dehydration, our skin is perfect, why our lips would be severely affected like that.
Yes there is something wrong with our lips, and there is necessarily an explanation, so yeah we can more or less hide this condition by a moisturizer but I don't lump chapped lips and EC together. Of course, it's a personal feeling.
I hope the Indian guy method will work, even if it seems very trivial, when will you get the stuff?