Consider a bipartite system composed of subsystems $A$ and $B$, with corresponding Hilbert spaces $\mathcal{H}_A$ and $\mathcal{H}_B$, spanned by $\{\chi_1,...,\chi_n\}$ and $\{\phi_1,...,\phi_m\}$, respectively.
Now consider a state belonging to this bipartite system, $|\Psi\rangle_{AB} = \sum_{i,j} \psi_{ij} |i\rangle_A \otimes |j\rangle_B$. We can perform a Schmidt Decomposition to rewrite this as $|\Psi\rangle_{AB} = \sum_{k=1}^r \sqrt{\lambda_k} |\chi_k\rangle_A \otimes |\phi_k\rangle_B$. Here, we have $r = \min(m,n)$, the rank of $\psi_{ij}$.
Now suppose we have a 1D spin-1/2 chain on $N$ sites with nearest-neighbour interactions, and we want to write this as a Matrix Product State (MPS). Suppose we start on the right-hand side and let subsystem $A$ correspond to lattice sites $1,...,N-1$, and assign subsystem $B$ to lattice site $N$. Because this is a spin-1/2 system, it seems to me that there are $2^{N-1}$ degrees of freedom in subsystem $A$ and $2^1$ in subsystem $B$; therefore, $r=\min(2^{N-1},2^1)=2$.
Now I want to introduce the "bond dimension" terminology. Would we say that the bond dimension of this MPS is $2$? And if we were now to repartition the total system $AB$ into $A$ = $\{$lattice sites $1,...,N-2\}$ and $B$ = $\{$lattice sites $N-1,N\}$, would the bond dimension of this "new" bond be $r=\min(2^{N-2},2^2)=4$?
This is my very long-winded way of asking: Suppose we have an MPS of the 1D spin-1/2 system given by $|\Psi\rangle = \sum_{\{s\}} \text{Tr}[A_1^{[s_1]}A_2^{[s_2]}...A_N^{[s_N]}]|s_1,s_2,...,s_N\rangle$. Then, assuming that we do not truncate any states of the SVD, would we say that the bond dimension between sites $n$ and $n+1$ is given by $r = \min(2^{N-n}, 2^n)$? And does this correspond to the rank of matrix $A_n^{[s_n]}$?
I've heard it mentioned that the bond dimension is connected to entanglement. As such, it seems a bit odd to me that the bond dimension (cf., entanglement) should vary as a function of position in the chain, especially if this means that sites just $t$ lattice points apart can vary by as much as $2^t$ in their bond dimension. Taking a very rough view on things, this would appear to create very strong "edge" effects that are, in a sense, amplified the deeper one goes into the material.
Apologies for the long question! Any insights are much appreciated :)