You define TWI_RX_BUFFER_SIZE as 8 . You transfer the register number and 8 bytes, so 9 bytes so howMany is 9 and receiveEvent() returns without doing anything.
The read_i2c_block_data() does the complete read in one I2C transaction (from start condition to stop condition with one repeated start condition). But you provide only one byte so the smbus block read will fail as the slave returns NAK (SDA passively pulled to high). Additonally I'm not sure if TinyWireS can handle a repeated start condition.
SMbus is a subset of I2C and you should read the documentation of it to know what exactly happens with each allowed operation.