When doing a POST using PAPI, the request has a reference to 'SpecContent'. It seems if that base64 representation is larger than larger than 1048576, it errors out due to a limitation.
Release: Component: APIPRD
In 220.127.116.11 the limit has been increased to 5 megs from 1 meg. From PAPI you can also reference external github content in the swagger to pull in content that allows you to get around this limit in the initial swagger load. The limit is enforced on the back-end so is consistent validation for UI and Portal API calls.