Or this doesn't reset whole arduino?
My understanding from reading Wire.cpp is that it does not reset the whole Arduino.
Sets the TWI timeout.
*
- This limits the maximum time to wait for the TWI hardware. If more time passes, the bus is assumed
- to have locked up (e.g. due to noise-induced glitches or faulty slaves) and the transaction is aborted.
- Optionally, the TWI hardware is also reset
How big should be capacitor?
As big as you've got. 100uf or larger.