Strangely, it halts with 512K and 1MB, but not above.
The settings aren't right, TOS and ST model are incompatible:
STE0; T102-7; 1024K; #; C1; C2; WM 1-1,0-1,0
T102 is for STF.
Normally Steem warns you at cold reset.
Despite this, it still worked in v3.8.2 and before but in v3.9.0 I changed memory detection emulation.
Normally it is more accurate.
Is it? Hard to tell. But it's not a bug, you should select STF or TOS 1.62, as no STE was delivered with TOS 1.02.
Thx for the report.