Large diff push fails

Setup Details:
OS: Ubuntu 20.04
Gitea: 1.17.1 Docker
Database: MYSQL 8
Reverse Proxy: Nginx

When I push first commit in an empty repo, I get the error:

Enumerating objects: 18064, done.
Counting objects: 100% (18064/18064), done.
Delta compression using up to 8 threads
Compressing objects: 100% (10953/10953), done.
Writing objects: 100% (18064/18064), 40.95 MiB | 80.80 MiB/s, done.
Total 18064 (delta 5009), reused 18064 (delta 5009)
error: RPC failed; HTTP 413 curl 22 The requested URL returned error: 413
fatal: the remote end hung up unexpectedly
fatal: the remote end hung up unexpectedly
Everything up-to-date

Forum and Github issues lists this issue could be becuase of limits in nginx. I increased this limits to absurd 32GB and timeout to 10k seconds, but still getting the error.

Nginx logs:

<Server IP> - - [29/Sep/2022:05:57:02 +0000] "GET /<my.username>/test-large-push.git/info/refs?service=git-receive-pack HTTP/1.1" 401 13 "-" "git/2.21.0"
<Server IP> - <my.username> [29/Sep/2022:05:57:07 +0000] "GET /<my.username>/test-large-push.git/info/refs?service=git-receive-pack HTTP/1.1" 200 229 "-" "git/2.21.0"

Repo is not that big (As can be seen in logs). Complete folder with all .gitignore files node_moduels and asstes is 264MB.

Try this on different scopes: http, server and location in your nginx.conf