Receiving that message "Filesystem image too big" with always differing values of how much bytes are too much made me wonder why.
I guess this is because in my case mksquashfs3-multi is used, which uses all available cores.
Therefore it may be helpful to document this in this section, that e.g. by calling taskset -c 0 make that little needed to fit into the firmware can be achieved by compressing just with one core (but takes longer).
Thanks for that great source of documentation and tools!