Proxy Generator created Larger files!

I have a screen capture video from OBS saved as MP4, and a file size of 16.9MB. It's kind of laggy in Resolve (though it plays fine in my Media Player), so I ran it through Proxy Generator, set to the 2nd option (H.264 8 bit 4:2:0 1080p). The resulting file size *of the PROXY* is 35.5MB, so it doubled in size!
How did that happen, and how do I fix it?
Thanks

It's kind of laggy in Resolve (though it plays fine in my Media Player), so I ran it through Proxy Generator, set to the 2nd option (H.264 8 bit 4:2:0 1080p).

Mp4 doesn't say what codec you used in OBS. It was probably h.265 or h.264.

H.265 will produce smaller files at the expense of more work to encode/decode. So your experience seems exactly correct, converting to h.264 will be larger files that are easier to decode.

Also both these codecs have an option for All-Intra or Long-GOP encoding. The former again favoring lower overhead at the expense of larger files. I sure hope Resolve chose All-I for its proxies, but not tested myself.

Really, h.264/5 is a horrible choice for performance. Both are slow without GPU acceleration. Dnxhr/Prores are what you want to use if performance is important.

Strangely BM did not offer these in the fancy new proxy tool on windows when it was launched. So the existing Optimized Media or Proxy workflow are required.

I would suggest setting DNxHR LB (low bitrate) and resolution to automatic. Automatic means 4k will be chopped to match 1080p timeline. 1080p stays 1080p. Do expect these files to still be larger than the h.265 source.

Quality loss in final export is not a concern. Resolve Defaults to ignore Proxies/Optimized Media for export. You will need to manually disable these for color work( though I doubt you are doing grading on OBS captures).