Functionally, sure - 500MB has been used before without issue. However, here are a few things you should know about setting the “Upload volume size” (or --dblock-size parameter):
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By default Duplicati will create up to 4 upload volumes in your temp folder to be queued for upload, so with a 500 MB volume size you may find 2GB of temp folder usage during job runs
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By default Duplicati downloads 1 “random” volume after each backup job and verifies it’s valid, so with a 500MB volume size this means that with each job once the backup is completed there will be a 500MB download from your destination for validation purposes. Depending on your provider or internet connection limits this may cause you to hit usage limits - and if your connection is slow, it may make the backup job seem to take a long time to run (even though the backup part is completed).
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When restoring a file, all blocks (by default 100KB) for the file must be downloaded. With a 500MB volume size, if you have a 100KB file, then that means the 500MB volume containing that 100KB block has to be downloaded. If your file is 101KB then it would have been backed up into 2 blocks - if they’re both in the same volume then only that one 500MB volume will need to be downloaded, but if they’re in two separate volumes the whole 1GB worth of volumes will need to be downloaded to restore that single 101KB file.
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If you have a backup retention policy OTHER than “Keep all backups” chosen, then as backups are “aged out” their volumes might need to be downloaded and the non-aged out parts re-uploaded. At 500MB per volume this could again chew up a lot of bandwidth and temp space.
So again, there’s no functional reason to worry - but the “side effects” might cause you some concern if you’re in a rush or have limited connectivity.
On the plus side, you can choose to change your “Upload volume size” at any time, so if you find 500MB is too big (or too small) for you, feel free to change it. Any NEW volumes after the change will use the new size. Old volumes won’t be “re-sized” until they are compacted into new volumes.