This is a old issue that was supposed to be fixed in your upgrade version.
I recall it was caused by people placing file size limits by mb instead of bytes.
Meaning that you entered 1mb instead of 1048576
I would double check that filemanager.inc.php is the current flavor on your site.
And double check
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Maximum size of gallery images.
If that is not the case???
Trouble ticket?
Maybe your method of upgrading was not picture perfect.
i recall your posted issue with using mysql 5.+
