I got lazy with naming files appropriately after the 6th hour of attempting optimizations and rebuilds. NewFolder(2) is the build folder.
I dont have any oversized files and my build is under requirements. This is not clear at all to me.
The error message says that the file "NewFolder(2).data" (note the .data extension) is larger than Itch allows.
Try manually unzipping the .zip file you're trying to upload and check the size of the file (not the folder) "NewFolder(2).data". I don't know how Unity created that file, and I can't tell you how to limit its size in Unity, but the Itch error message is clear: that file inside the zip is the problem. What you need to find out is its size and how Unity is creating it so you can optimize it.