Disable buffering feature:

ARTIFACTORY: Why am I getting intermittent 500 errors when uploading large files?

AuthorFullName__c
Luzeen Halaby
articleNumber
000005653
ft:sourceType
Salesforce
FirstPublishedDate
2023-03-30T06:23:03Z
lastModifiedDate
2023-03-29
VersionNumber
1
The buffering feature means that every coming request is being read before it is passed to the proxied server (Artifactory).
Up-to-date versions of Nginx have proxy_request_buffering enabled by default.
Therefore, we might observe 500 internal errors while having this setting.

So what is happening is then: 
While uploading large files, firstly the entire body request is being read and buffered, and since there’s not enough space it failed.