127 GB / 128 GB / 137 GB maximum hard drive capacity in Windows 98
The 28 bit LBA supports 2^28 sectors which works out to 268435456 sectors. Each sector holds 512 bytes and therefore the maximum capacity is 137438953472 bytes.
This is the maximum Windows 98 supports for a bootable hard drive. On the Internet you will find references to 127, 128 or 137 GB. The 137 is the way hard drive manufacturers calculate the conversion from bytes to Gigabytes. They use the base 10 system and convert from byte to kilobyte with a factor of 1000.
Windows uses the base 2 system and converts from byte to kilobyte with a factor of 1024.
With SeaTools one can limit the capacity of certain hard drives and so I created a drive with exactly 268435456. This drive calculates to 128 MB capacity using Base 2 system, and after formatting is reported as a 127 MB drive by Windows. The BIOS POST summary shows it as a 136 GB drive.
Fdisk and format are 16 bit applications and can't display the full capacity. This can just be ignored and is purely a cosmetic issue. To avoid this use or create a hard drive with 64 GB or less.
The video shows all the steps in order to create a 128 MB hard drive, partition, format it and install Windows 98.