Yes, exercise can absolutely reduce breast size. However, there are two things to make note of and that can limit the impact exercise has on the breasts.
First of all, breasts are composed of fat and glandular tissue. The fat cells can shrink, the glandular tissue does not. Therefore, the more glandular tissue in the breasts, the less the breasts can potentially shrink from fat loss.
(Fun fact: Gynecomastia in men is when they have a bunch of that glandular breast tissue in their chest. Gyno isn't simply fat in the chest, and it's the reason it requires surgery.)
Second, where you lose fat from and at what rate is dictated by the distribution of dominant alpha and beta receptors in your body. For example, men typically have high concentrations of A2 receptors in their love handles and lower belly (often referred to as stubborn fat). The body prioritizes areas with concentrations of dominant alpha-2 receptors less when burning fat. Women generally have high concentrations of A2 receptors in their breasts. So, they will still burn that fat, but at a lower ratio compared to other places with higher concentrations of beta receptors.
If a woman loses 20 lbs, her breasts will almost certainly be affected even if it may not result in a difference of a full cup size.