AWS ElasticBeanstalk Nginx rate limiting not working for Nodejs application - node.js

Question

This is the file rate-limit.nginx.config which I placed in the .ebextensions folder of my Node app.
files:
"/etc/nginx/conf.d/00_proxy.conf":
mode: "000755"
owner: root
group: root
content: |
upstream nodejs_new {
server 127.0.0.1:8081;
keepalive 256;
}
limit_req_zone $binary_remote_addr zone=loginlimit:10m rate=5r/s;
server {
listen 8080;
if ($time_iso8601 ~ "^(\d{4})-(\d{2})-(\d{2})T(\d{2})") {
set $year $1;
set $month $2;
set $day $3;
set $hour $4;
}
access_log /var/log/nginx/healthd/application.log.$year-$month-$day-$hour healthd;
access_log /var/log/nginx/access.log main;
location / {
proxy_pass http://nodejs_new;
proxy_set_header Connection "";
proxy_http_version 1.1;
proxy_set_header Host $host;
proxy_set_header X-Real-IP $remote_addr;
proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
}
gzip on;
gzip_comp_level 4;
gzip_types text/plain text/css application/json application/javascript application/x-javascript text/xml application/xml application/xml+rss text/javascript;
location /.well-known/acme-challenge {
alias /var/app/current/public/letsencrypt;
}
location /auth/generateotp/ {
limit_req zone=loginlimit;
}
location /auth/verifyotp/ {
limit_req zone=loginlimit;
}
}
container_commands:
01_reload_nginx:
command: "sudo service nginx reload"
02_remove_config:
command: "rm -f /tmp/deployment/config/#etc#nginx#conf.d#00_elastic_beanstalk_proxy.conf /etc/nginx/conf.d/00_elastic_beanstalk_proxy.conf"
Once I deployed this, I have ssh'd into the instance, and made sure that the /etc/nginx/conf.d/00_proxy.conf file exists.
I am testing the /auth/generateotp with ab tool, and the API accepts any number of concurrent requests, whereas its supposed to accept only 5 requests in one second.
What could be the issue here?