4K clusters limit the maximum volume and file size to be 16TB
This is because the maximum number of clusters that NTFS supports is (2^32 – 1). Thus a 64 KB AUS allows a largest volume (or file) size of 256 TB.
Since Windows Server 2019 and Windows 10, version 1709, a 2048 KB AUS is supported. Whereas 64 KB was the earlier max cluster size for older OS versions, a 2048 KB AUS now allows a largest volume (or file) size of 8 PB (8 * 2^50 Bytes).
For more information, see Support for large volumes.
Clarifying Terminology:
A cluster (MS-specific terminology) consists of one or more consecutive physical sectors and represents the smallest allocatable unit, the Allocation Unit Size (AUS). The file system considers the AUS the smallest addressable unit. Thus, file sizes are quantized to the ceiling function of the AUS, even though I/O still takes place quantized to the ceiling function physical sector size.
A physical sector is the smallest physical storage unit on the disk, i.e. the minimum quanta of data that the HDD can read or write. The hard drive considers the physical sector the smallest addressable unit.
A physical sector is always equal to or larger than the cluster size.
If someone wants to clarify the relationship between "cluster" and "Logical Sector Size," I'd appreciate it. It seems to me that a logical sector is the more OS-independent term for what Microsoft refers to as a cluster, but I cannot be sure.