It seems like 1mb limit I passed was on the “gzipped” version. So even if secret command “wrangler pages function build —minify” exists “wrangler pages deploy” does in fact not seem to minify. I guess I can understand it because minifying will make the error logs harder to parse, so it should probably not be the default…
Secondly I realized that npm package I recently installed “effect” was 70kb. Removed that and my project seemed to deploy again.