Can I submit custom JVM arguments when starting the sandbox using the `daml` CLI?

For example to control the heap size. If yes, what’s the syntax to use?

There is no way to pass it via the CLI but you can pass it via environment variables. The standard environment variable that is supported by all JDKs is JAVA_TOOL_OPTIONS so something like export JAVA_TOOL_OPTIONS="-Xmx1g" before you run daml sandbox should do the trick. Depending on the JDK there are also some other environment variables, e.g., openjdk has _JAVA_OPTIONS which takes precedence over CLI flags if you really need that.