Respond to the OPTIONS request direct from the NGINX.

server.conf

server {
    listen 80;
    server_name www.server.name;
    
    location / {
        # set default content type here
        # add_header may cause double header
        types {}
        default_type text/html;

        # for OPTIONS return these headers and HTTP 200 status
        if ($request_method = OPTIONS ) {
            add_header Allow "POST, OPTIONS";
            add_header Access-Control-Allow-Headers "Origin, X-Requested-With, Content-Type, Accept";
            add_header Access-Control-Allow-Origin "*";
            return 200;
        }

        if (!-f $request_filename) {
            proxy_pass http://handler;
            break;
        }
    }
}

Try using $request_method = 'OPTIONS'

It seems that in my case it was caused by my nested location directives. I originally had the check/return under the base location, but it needed to be under the more specific one. Hope this helps anyone else who is doing a similar thing!

location /api/ {
   alias /var/www/mysite
   try_files $uri $uri/ =404
   index index.php
   # Didn't work here

  location ~ \.php$ {
    # Works here
    if($request_method = 'OPTIONS') {
      add_header Content-Length 0;
      return 204;
    }
    fastcgi_pass .....
  }
}