When I had that problem I think it was because I was using a simple boot disk rather than a full version of DOS to format the hard file. I eventually used disk images from winworldpc.com.
https://winworldpc.com/product/ms-dos/622
You're likely aware that you must install DOS before Windows 3.1 (or 3.11, as it was in my case last time). The contents of the Windows disks can be copied to a directory on the hard file before running setup, to avoid disk swapping during installation, but this does not work when installing DOS.
The way I did it was to set PC0: as A: on the PC Task configuration screen, after placing PC0 in Devs; that way I could change the disk images through WinUAE when prompted.
I've only formatted hard files 50mb in size, incidentally.