upstream sent too big header while reading response header from upstream

[Jeroen Ooms]

After I added some CORS headers to my API, one of the users of my
nginx-based system complained about occasional errors with:

upstream sent too big header while reading response header from upstream

He also reported to have worked around the issue using:

proxy_buffers 8 512k;
proxy_buffer_size 2024k;
proxy_busy_buffers_size 2024k;
proxy_read_timeout 3000;

However unfortunately I was unable to reproduce this problem myself. I
also had a hard time figuring out what the exact problem is.

Some questions:

 - What exactly does this error mean? Does it mean that response
contained too many headers? How many is too many?
 - Is it wise to increase the buffer sizes as the user reported? What
would be sensible defaults?