Update: the problem was with the file encoding. See answer.
I've got a json payload that is 15.7 MB coming from blob storage. When I pass the output to a ParseJson action I use the json() converter function, but I get this error:
Unable to process template language expressions in action 'Parse_JSON' inputs at line '1' and column '2792': 'The template language function 'json' parameter is not valid.
Then I took the same json file and stripped it down to 1 KB and tested with the same Logic App and it worked. So is there a size limit for json()?