by Ken Task.
Not a Windows person myself, but your Moodle (the xampp local host) is a moodle so you should be able to turn on Debugging all the way to developer to see if that Moodle is complaining about anything else.
Also, in your PHP info page of the Moodle found in site admin -> server should show php settings for many things ... post_max and upload_max .... you are looking for settings related to file size.
Might look at:
https://docs.moodle.org/39/en/File_upload_size#Windows_XP_and_Server_2003_Instructions
even if you running xampp and the directions above are for XP and Server 2003 they should be similar, I would think ... but here again ... what does a non-Windows user know!
'SoS', Ken