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The bot was not actually talking to the --local server: an older telegram-bot-api process without the --local flag was already bound to port 8081, so all requests hit the non-local instance (whose 50 MB limit applies). Check which process is listening on the port (Task Manager/htop/top) and confirm the running instance's launch parameters include --local; kill the stale process and restart with --local. Only one bot API server can own the port at a time.
Source: https://github.com/tdlib/telegram-bot-api/issues/371
Source: https://github.com/tdlib/telegram-bot-api/issues/371