"Este baño es grande."
Translation:This bathroom is big.
I had that answer and was corrected with "This lav is big". Maybe in Britain, but not in North or South America.
Britain has a number of dialects, so I can't rule it out, but I doubt it would ever be used in this context. A "lav" is a toilet, not a bathroom.
Toilet can refer to the room as well as the object. Toilet (the room) and bathroom are also frequently used interchangeably. Though admittedly some bathrooms don't have toilets in and some toilets (room) don't have baths in. Some bathrooms don't have baths in for that matter.