client_max_body_size defaults to 1 megabyte. A request with a larger body is rejected by nginx itself with 413 Request Entity Too Large, and the upstream never sees it. The application's own upload limit is irrelevant because the request stops at the proxy.
The error page is nginx's default, so it is easy to misattribute to the application, and the error log line reads client intended to send too large body.
Set the directive in http, server, or location context, with the location form being the safest since it raises the limit only for the endpoints that accept uploads. A value of 0 disables the check. Two adjacent directives matter for large uploads: client_body_buffer_size controls how much is held in memory before nginx writes the body to a temporary file, and client_body_timeout at 60 seconds applies between successive read operations, not to the whole upload, so a slow but steady upload does not trip it. When nginx sits in front of another proxy, every layer needs the limit raised.