Lower bit rate still gives me massive file

I'm running into a very annoying problem here. I need to encode some videos in a smaller file size, and in the past reducing the bit rate always worked for me. Now when I reduce the target and maximum from 10 to 2, it reduces the file size by almost nothing!

Even if on the estimated file seize it says 3MB, the final render will be closer to 40MB. I really don't understand what I'm doing wrong here. Can anyone help? Has anyone ran into this? Posting a screenshot of my settings for comparison. Exporting as h.264, btw. Thank you