With two cheap PSRAM chips and a bit of trickery, you can upgrade that to 32(.5) MB, which is certainly enough to run a small OS.
In principle you can add even more memory with bank switching, but 32 MB is the limit for a flat address space.
The first Amigas had 512k of ram. Both had much less processing power.
With 32mb you could probably run some kind of Linux.