Hi Freek.
I think you're running into an IIS limit on the request size. See this post for a similar problem, and a description of a solution: https://www.outsystems.com/forums/discussion/20948/problems-uploading-large-approx-200mb-osp/
Note that your symptom is different, since you're saying you get a 404, but it's worth a try. I had the same problem you're describing, and I confess I cheated by uploading a smaller file to test that the feature was working.
Another thing you could try is to unzip the file yourself into C:\Windows\Temp\.local-chromium\Win64-{release} (can't say for sure this is the correct path right now, but from memory that should be very close).
Anyway, you're right that this is still a primitive support. In the future, I want to have an easier way to support that scenario, but as you can see there's this limitation that I have to engineer my way around it. I'm also envisioning a satellite app to upload the file, so you can install it only if you have the need. That's why the feature is exposed as an API.