Comment 8 for bug 995144

Installing grub to a partition requires that the core image file have its sector list embedded in the MBR so it can be loaded, which comes with its own set of problems, including failure if the file is moved by a defragger, and getting block lists on some filesystems such as btrfs is not even possible. This is why such setups are unsupported by the grub developers and so this will not be changed.

If you want grub to fit within the first 63 sectors of the disk, you will need to use a simple boot setup, such as a plain ext2 /boot partition, rather than more complex setups which simply requires more code than can fit there.