Your image is simply too large. Reduce the width and height to something less than 128px.
Icon size limits for cursors in CSS | MDN
…the limit of the cursor size is 128×128px. Larger cursor images are ignored.
Example:
cursor: url("data:image/svg+xml,%3csvg xmlns="http://www.w3.org/2000/svg" width="32" height="32" ...") 16 16, pointer;
https://jsfiddle.net/bx4og7n5/
Edit: Added hotspot (center coordinates) for the cursor (see Dennis Bauszus’ comment)