Seems to be broken after factorio 0.18.19 update, or maybe that's just an incompatibility with another mod.
I get the following message when starting the game:
"
Error loading mods
Failed to load mods: Error while sorting items-to-place for entity prototype "steel-warehouse-11x5" (container): item-to-place "steel-chest" count (55) can't be larger than the item stack size (50).

Mods to be disabled:
-WideChests (3.0.5)
"

I'm using Krastorio 2, which adds an item called warehouse. Could it be that? Weird that it used to work up to 0.18.18.

EDIT: In the Version 0.18.19 patch notes: https://forums.factorio.com/viewtopic.php?f=3&t=83968
it says: "Added a check to make sure placeable_by.count isn't larger than the placeable_by.item.stack_size."

Workaround: Backdate your copy of factorio to 0.18.18 and reconfigure Merging Chests to have a max area of 50, then update to 0.18.19. The workaround prevents entities that require more than 50 items to autoplace from registering during startup phase until a fix is developed.

Ok, now it is required to have "Modify chest stack size" mod setting set to true. I will remove this setting from mod.

Whoa, thanks a lot for the quick reply! And thanks for the support for your fantastic mod!

Fixed in 3.0.6

Stack size of 1.6k was funny to see :-)
Thanks for the fix.

Stack size of 1.6k for steel chests is ridiculous.

Yes, that's why it was previously a mod setting.

I kinda solved it by limiting the area to 50.

Stack size of 1.6k for steel chests is ridiculously funny to see :-)

especially when limiting production to one or two slots in an output chest (with the red X) :-)

general hint : to avoid this and similar problems on any of my maps, i try to rush for red/green wires and set conditions on the inserters depending on the exact amount of items in chests, no matter how large stacks are. this also allows to easily modify the limits by connecting a constant combinator and setting the limit as negative value, with a condition of "itemtype < 0" on the inserters.