Should I use self-leveling concrete or mortar to level a patched area of concrete prior to tiling it?
If you just have 2ft x 3ft there's no problem using usual (not thin-set) mortar to level the surface - it will be cheap (likely cheaper that self-leveling concrete) and quite easy to do.

Thinsets indeed can crack if it's too thick and also they are not very strong - don't withstand compaction as well as ordinary mortar and so there indeed is a chance that you have tiles cracking after thinset applied too thick. How much thick is "too thick" is typically specified by the thinset manufacturer and I seriously doubt that 3/16" (which is less than 5 millimeters) would be a serious problem - that is likely within spec. The problem is you might have hard time applying the thinset so that the tiles perfectly match the uneven surface - it's much easier to do if the surface is even, although my tiling experience is quite limited and I guess there're ways to use the thinset on uneven surfaces and have good results.