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2.5.4 Avatar "size" limited to "16K"?

I keep getting this message when trying to pick images from my local file system as an Avatar in my profile:

“The image is too large to use. Please specify an image 16K or smaller.”

This comes up when I pick images that are as small as 4K (JPEG) on my file system. I can pick some images, such as small GIFs that are < 16K. Oddly, I can also pick VERY large images (1024x767 700+K) successfully too.

Can someone shed some light as to what is happening?

What are the constraints? payload size, pixel size, unpacked RAW bitmap size???