I think there is a bug in how timeout server is treated. The documentation says "The inactivity timeout applies when the server is expected to acknowledge or send data." In http mode this response is only due AFTER the request has been send completly, esp. after the full body (file upload!) has finished. Insead, the counter starts ticking much earlier.
This leads to very various problems with upoads and more or less arbitrary timeout values to make site work.
See e.g. here https://bugs.launchpad.net/fuel/+bug/1326082