I thought it would decline equally after adding more colonists into colony.
Do not expect my algorithms to be linear.

(They almost
never are. I like to challenge players a bit to figure out how it works.)
In this test game it even increases after adding the sixth colonist
This may be because you have hit a threshold that triggered an additional happiness bonus.
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Actually my algorithms are usually so complicated and consider so many variables that even I cannot fully predict them.
(Directly after coding the algorithm I usually still can, but half a year later, I would also have to study it again due to all the variables and thresholds included.)
The only thing I can tell you is "trends", like e.g.
- Food --> Good
- Bells --> Good
- Open Borders --> Good
- ...
- Overpopulation --> Bad
- Slaves --> Bad
- War --> Bad
- ...
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All my algorithms are either:
A) Non-Deterministic (Chance-based)
B) Non-Linear (Thresholds or Self-Enhancing or Self-Balancing)
C) A mixture of those
Happiness is just:
B)
- There are many variables influencing each other
- Thresholds that trigger different gradients / behaviours
So, some effects are only triggered if you hit a certain
threshold.
(Below that threshold there will not be any effect.)
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There are in total
14 "sub-algorithms" (each with a
formula of its own) that Happiness / Unhappiness uses.
Also they may have side effects with each other. Thus potentially self enhancing or self balancing.
(As I said, do not expect my stuff to be "linear" or that easy to explain / calculate.)
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But there are also "thresholds" in these "sub-algorithms" as I tried to explain.
(Once you hit them the algorithm / curve may "jump" or change its gradient.)
Here is a simple case where the population component of "Unhappiness" is not calculated if the village is to small.
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By the way:
There are also
rounding issues with integers.
e.g. as Integers
So the adding just 1 more colonists may acually make a big difference.
(Because you overcome the rounding cliff and a 0 may become a 1.)