Is there an existing issue for this?

• I have searched the existing issues

Current Behavior

I have a Cloudformation template file that is now about 54K. I started receiving an error recently that this file was too large because I was passing it as a TemplateBody, and there is a check enforced here to mirror the real AWS limit:

Following the recommended advice, I tried creating an S3 bucket within localstack and then uploading the template to it, and then changed to passing in TemplateURL to the CreateStackCommand. Oddly, I got back the same complaint about TemplateBody. I also tried it using awslocal and got the same result. This made no sense to me since I was clearly only passing in the URL argument.

Further investigation into source code showed that there is a modification being made to the arguments in the case where the TemplateURL points to a local source, where it is rewritten to a local path and then loaded as a TemplateBody in the prepare_template_body function:

https://github.com/localstack/localstack/blob/master/localstack/services/cloudformation/api_utils.py

The end result is that it appears there is no way to load a template file > 51K using a local S3 bucket, and I'm actually not sure of any other way to achieve loading a larger file without requiring an external host.

Expected Behavior

Using TemplateURL as an argument to the CreateStackCommand function should have the same limit as AWS (now 1MB max I believe) regardless of whether it's a localstack-hosted S3 or a real S3 bucket.

How are you starting LocalStack?

Custom (please describe below)

Steps To Reproduce

How are you starting localstack (e.g., bin/localstack command, arguments, or docker-compose.yml)

Using TestContainers to spin up localstack programmatically as part of a component test suite.

Client commands (e.g., AWS SDK code snippet, or sequence of "awslocal" commands)

All client commands are using the AWS SDK:

const client = new S3Client({endpoint:  this.S3_URL, forcePathStyle: true});
await client.send(new CreateBucketCommand({Bucket: "hmlg"}));
await client.send(new PutObjectCommand(({
	Bucket: "hmlg",
	Key: stackName + "-template.yml",
	Body: templateString //The template read from disk
})));

const command = new CreateStackCommand({
     StackName: stackName,
     TemplateURL: this.S3_URL + "/hmlg/" + stackName + "-template.yml"
 });
try {
	await client.send(command);
} catch (error) {
	console.error(error);
	return false;
}

Environment

- OS: MacOS Ventura 13.2.1
- LocalStack: 

LocalStack version: 1.4.1.dev
LocalStack Docker container id: 70df07093834
LocalStack build date: 2023-03-02
LocalStack build git hash: b81ef493

Anything else?

No response