drupal 8 nginx recipe breaks responsive images

We have many drupal 7 and drupal 8 sites running on nginx-1.10.2-1.el7.x86_64, RHEL 7.3, php56u-5.6.30-2.ius.el7.x86_64. In general, we continued to deploy the same old nginx.conf (old and new conf files attached to this report) for drupal 8 that we had for drupal 7, until recently. When updating core from 8.2.7 to 8.3.5 on one site, the site broke. (Front page loads, but click any link and get ERR_TOO_MANY_REDIRECTS). So I found a new nginx drupal8 recipe (https://www.nginx.com/resources/wiki/start/topics/recipes/drupal/) that has changed everything from `location /` and everything after it. This fixed the core issue so 8.3.5 was able to load the front page and also subpages, however, the Responsive Images module is broken. When a user on a mobile device browses the site, the `sites/default/files/styles/article_mobile_/public/articles/*.jpg` images fail to generate, so users see broken images. We were able to revert to the old config and the old core, and we were able to confirm that as mobile users browse the site, those images get generated on the fly. When we applied the new nginx recipe on 8.2.7 (or 8.3.5) those images don't get generated, so the site is broken. But since drupal 8.3.5 is broken on the old nginx recipe, it means we can't stay on the old nginx conf recipe.