I found this on GitHub in the code for the server
packages/server/src/config.ts
itemSizeHardLimit: 250000000, // Beyond this the Postgres driver will crash the app
packages/server/src/models/UserModel.ts
if (itemSize > this.itemSizeHardLimit) throw new ErrorPayloadTooLarge(`Uploading items larger than ${prettyBytes(this.itemSizeHardLimit)} is currently disabled`);
So it looks like the server actually has a 250MB hard limit to prevent the Postgres driver crashing the server.