No, 1 GB of RAM is not enough for package management of a Fedora based system. Which in my opinion includes RHEL and rebuilds, but the extent of the problem on the size of the repos involved. Yes, a distro major version upgrade transaction is among the biggest, and could be problematic as well.
Paging out during a package transaction is a miserable experience. Slow. And even with the swap possibly oom killed in a dangerous place. I am being unfair to swap space by only calling this 1 GB, but the memory system behaves differently than if you had 2 GB of DRAM.
For recent reports of this happening, see mailing list thread dnf makecache memory usage increase, and Bugzilla "dnf update" runs out of memory on swapless machines with 1G or less of RAM. Note that the entire dnf metadata is being converted into some libsolv database in memory, on top of what it does to parse those dependencies.
If you moved your instances to image based updates, that could be done once on a bigger box. Upgrade a primary copy, make a disk image out of that, and boot new instances from the updated one. Likely a significant change of how you do updates. See also: rpm-ostree.
Commenters on the bug have noted file lists blowing up the size of metadata. Especially with the number of packages in Fedora, how often they update, and how many have still have legacy file dependencies. Consider maintaining your own custom repos of just a subset of the packages you use.
microdnf is the package manger without Python. While there might be some memory savings to switching, its authors have not laid out in detail its limitations. Possibly wait on this one, Fedora is inevitably going to change the package manager again anyway.