Yes, 3.7 GB is just wrong and I don't even know how Magisk made heads or tails of it.
If you have Windows you can use imgutil.exe (in my sig) to see what you have.
Code:
C:\>imgutil /v mystery.img
Code:
fastboot boot yourimage.img
This is correct to try out an image without flashing.
There are situation where it does not work but flashing it would.