I can tell that you have a mod that adds extra inventory slots which is probably the cause and if so, I would remove it. Also, go ahead and post your log if you want us to take a closer look...
Major version (and sometimes minor) releases are not compatible with each other. For instance, say you have a world created in 1.0, it would not be compatible with 2.0. It has always been this way unfortunately.
I am aware of the mod, but I was more meaning for it to be available in the base game since console do not have access to mods. QoL feature, if you will ^^
Edit: Hood Ornament LMAO
The issue is Sony and Microsoft will not allow the game to have more than 1GB of space even if your hardware has more available. The limitation is set by them, not TFP.