Easy to test, just make a smaller one.
I haven't come up against image size limits in the 700, but IIRC, there is an image file size limit above which ADE will refuse to display images as well.
As for an option to downsample images, it's certainly a possibility, but you've picked a bad time to ask as calibre's conversion subsystem is undergoing a re-organization and new features are on hold until that is complete