137 is the maximal length of a bootloader data in a BLE packet. Also, you cannot just changes this value in the firmware project, because it also hardcoded in CySmart App as well.
Anyways, there should not be any problem (No error like "write long characteristic value timed out" message ) with 137 command data field value.
Could you please attach your project , so that we can have a look and resolve the issue.
Are you using CySmart PC as a OTA Host or CySmart Mobile App?
I use the dongle on the pc; it did work when I tested it with the external memory bootloadable example code.
I have sent a link to my firmware if it work for you.
Well, now the OTA transfer process is successful with the dongle client.
Not sure what caused the failure previously: I re-made the project starting from the OTA External Memory Bootloadable example and added my application without any significant edit to the code.