There are some who claim that MMP will allow small fringe parties to call the shots. But the 3% threshold chosen by the Citizens' Assembly will keep out many of the single-issue extremists.
In 2003, even the Green Party won less than 3% of the vote. No other small parties have won more than 3% of the vote in recent times. But even if some smaller parties do achieve the 3% threshold, it is far more likely that a major party will want to form coalitions with other large parties where compromise is both possible and more agreeable.
Any fringe parties that win representation at Queen's Park would be under scrutiny by the public and the media for their actions. Narrow-interest parties that have little broad appeal tend to have short staying power. In other jurisdictions with MMP, such parties emerged with representation, but frequently disappeared after voters got a closer look at them (and decided they didn't like what they saw) and subsequently those parties slipped back under the vote threshold for representation. Such a scenario would likely happen here.
There is no history of fringe parties holding the balance of power in European countries with MMP.