It looks like you are right. I was not able to create texture that exceeds 4096x4096 size. Look at the error:
[SWF] Main.swf - 14,918,503 bytes after decompression
LEVEL COUNT: 43
[Starling] Context ready. Display Driver: DirectX11 (Enhanced)
ArgumentError: Error #3766: RectangleTexture too big (max is the larger of 4096x4096 or the size of the backbuffer).
Even though I used DirectX11 (Enhanced). And this is true also for release build not just for the debug. So the memory issue could also the problem. I thought that they increased texture sizes to more than 4096
I was using AIR SDK 188.8.131.52
This is what it says in AIR 29 Docs:
AIR Desktop-Increase in Texture Limit (Beta Only)
Till AIR 28, maximum texture size supported by AIR is 4096x4096. In AIR 29 (SWF version 40), we have increased the texture limit to 8192x8192 pixels. A new read-only property Context3D::supports8kTexture has been introduced which returns true only if the 8k texture is supported by the hardware.
This feature only supports the rendering of Normal and Rectangular textures. Textures such as Cube, Video, Compressed, and Compressed_Alpha will not be supported. The feature is available in AIR 64 for Mac, Windows 8.1 and above.
Since 8K textures are quite heavy, it is recommended to upload the textures asynchronously.
But I was still unable to create texture that exceeds 4096x4096 pixel size.