I believe it is restricted indeed, you could choose to select with a select popup or use this widget. Especially when you have a lot of entries this widget works great! https://appstore.home.mendix.com/link/app/2695/AuraQ-Limited/AutoComplete-widget.
Be advised that this widget has only community support.
There is no problem using the reference selector on the data view, my cleint can show all the items they want. But when using it on a editable datagrid, they are only able to see half of the list.
The autoComplete and pop-up are great alternatives for use on a dataview but not within the editable datagrid.
To answer your question, yes, I believe there is a limit. From a UX perspective; however, I would highly recommend you steer them towards a different way to work. I know how clients are and how resistant to change they can be, but I can't imagine a scenario where a 50+ drop down attribute list inside of a line on a data grid is the optimal way to interact with the data. Consider lookups that populate based on intelligence you build in such as entering an order associated with that product shortens the list of candidates or sub-products to choose from that are associated to that data, or get rid of the editable data grid entirely and think about a different way to work with the form. I'm sure I am preaching to the choir but maybe it helps someone else reading this.