I never said that the game doesn't recognize or read textures with a resolution higher than 1024x1024; I was talking about how overloaded it becomes. And because of this, the game often crashes. I have a gaming laptop from 2019, an ASUS TUF Gaming FX505-DT with Win10x64, 16 GB of RAM, a 1650GTX 4GB video card, and an AMD Ryzen 3550H processor at 2.1 GHz. This is more than decent hardware. Nevertheless, I installed mods by the respected master Zahar0z. And his textures have a size of 2048x2048 and weigh over 20 MB each. This is a lot for the game. Yes, the game reads the textures, but sometimes there's a glitch where, instead of textures, his units have a checkerboard pattern. The same goes for other custom mods, where people, in pursuit of a "high-quality image," create textures with huge resolutions and huge sizes. This is not good. The well-known colleague Xuxo creates textures with acceptable resolutions and sizes, and everything works, nothing crashes, and everything looks normal. Heroes 5 is still not Heroes 6, where each texture can weigh up to 5 MB (or more), and everything works fine and doesn't crash. Heroes 5 is an old game with its own engine; you shouldn't force it; you need to work with it carefully.
As for the custom mods that I use and that caused me to constantly crash out of the game during gameplay: I set the appropriate resolutions and sizes for the textures used in the custom mods, and the crashes stopped happening.
You can use Large Address Aware; it theoretically solves the problem of insufficient memory. From my tests, everything works, with a lot of 2K textures. It's interesting how it will perform in the long run; it needs to be tested.
In general, the hero textures are fine; I would like to upscale the entire UI, as the blurry interface is very noticeable in 2022.