I am hoping the limit is just a MacOS thing, like how MST1.2(?) was supported on my old MBA(2015) hardware but not available on MacOS. I could Daisy chain DisplayLink monitors on Linux, but MacOS wouldn’t let me, and I was limited to a single monitor.
I use Asahi Linux on M2 now, and the USBC display support isn’t done yet, but I am hoping it would be better than MacOS.