4 MB is the limit for zipped size, but Lens Studio also has a limit for memory consumption, which is listed in the Performance and Optimization guide.
You can check memory consumption by pushing your Lens to device. If your Lens is failing to submit because the memory is too high, the problem is likely the size of the images (pixels). Once a pixel is loaded into memory, a compressed pixel costs the same as an uncompressed pixel. Thus, further compression won't fix your problem.
- Open your projects folder on your computer.
- Open your images under the Public folder.
- Open these images in a photo editor like Photoshop and go to Image -> Image Size. The images likely are 2048 x 2048.
- Scale down the width to reduce the size and make sure the lock is activated so that the height scales proportionally.
Try scaling down to 1600, then 1024 if that doesn't work, then make sure to repeat the above steps for all your images. This will greatly reduce your memory footprint!