Benchmarking Small Language Models and Small Reasoning Language Models on System Log Severity Classification

System logs are crucial for monitoring and diagnosing modern computing infrastructure, but their scale and complexity require reliable and efficient automated interpretation. Since severity levels are predefined metadata in system log messages, having a model merely classify them offers limited standalone practical value, revealing little about its underlying ability to interpret system logs. We argue that severity classification is more informative when treated as a benchmark for probing runtime log comprehension rather than as an end task. Using real-world journalctl data from Linux production servers, we evaluate nine small language models (SLMs) and small reasoning language models (SRLMs) under zero-shot, few-shot, and retrieval-augmented generation (RAG) prompting. The results reveal strong stratification. Qwen3-4B achieves the highest accuracy at 95.64% with RAG, while Gemma3-1B improves from 20.25% under few-shot prompting to 85.28% with RAG. Notably, the tiny Qwen3-0.6B reaches 88.12% accuracy despite weak performance without retrieval. In contrast, several SRLMs, including Qwen3-1.7B and DeepSeek-R1-Distill-Qwen-1.5B, degrade substantially when paired with RAG. Efficiency measurements further separate models: most Gemma and Llama variants complete inference in under 1.2 seconds per log, whereas Phi-4-Mini-Reasoning exceeds 228 seconds per log while achieving <10% accuracy. These findings suggest that (1) architectural design, (2) training objectives, and (3) the ability to integrate retrieved context under strict output constraints jointly determine performance. By emphasizing small, deployable models, this benchmark aligns with real-time requirements of digital twin (DT) systems and shows that severity classification serves as a lens for evaluating model competence and real-time deployability, with implications for root cause analysis (RCA) and broader DT integration.