How to pass a literal string into drush config-set
Short answer, preface the value with an empty space (inside the quotes).

This appears to be a drush bug. This fails with the unknown option bit:

drush config-set system.site name '--max-filesize=blah'


However, if I preface the value with a space:

drush config-set system.site name ' --max-filesize=blah'


this works as expected.

Edit: It is also worth noting that drush config-edit would bypass this issue altogether, and allow the value to be set via your preferred text editor.