I seem to have trouble with ATR over 1MB. I use atari800 version 1.3.1 emulator in Linux.
First of all I sold my Atari 130XE fifteen years ago. So my knowledge is lacking.
No problem with small small files, such as FORTAPOCALYPSE.ATR or 215B.ATR (133kB). FORTAPOCALYPSE.ATR boots and autostarts, and 215B.ATR has a minibootloader and menu. Works great.
With a GAMES002.ATR (size 1048592) it is different. When I try to display a directory in DOS 2.5 it brings DOWN my whole Linux system. It displays about 10 files from the disk, and then everything halts.