It is. We have a lot of users having several million domains on their blocking lists without ever having had any issue even on 8 GB SD cards.
I'm sure we'll get there in the end, but I wonder if there is any other issue with the file system on your device.
Removed file system testing instructions
edit Ignore the filesystem test instructions I wrote here before.
while building the tree does never mean the database is too large. It always means: the disk is full.
And this IS the case for you, as I've just seen that
your temp directory is too small to hold the growing tree structure. We intentionally store the tree piecewise on-disk (instead of entirely in-memory) while it is growing to avoid issues with the typically severely limited amount of RAM on SBC devices.
Solution: Enlarge your temp directory (it should not have been this small to even begin with!) and your issue will be resolved.