I found out that the most important thing is the video bitrate.
You need to make sure it's below 3MB or it will not run - on the 2.1 inch device it seems it needs to be below 2.4MB
Usually if you are encoding in one pass the target bitrate will not be respected so the video will actually be way above it.
I had to test multiple bitrate values until the final video was actually below 2400 kbps, then it ran.