not even an answer
by brute-forcing a few ideas it looks like there are more hidden variables than previously thought. it is probably safe to say that the upper limit is a result of "running out of memory" especially when calculation time does not play any role. the thing is that there are factors even outside of LAMBDA that affects the computational capabilities of the formula.
establishing the baseline:
all below formulae are maxed out so they work as "one step before erroring out". please keep noticing the numbers as a direct representation of row (not cell) processing abilities
starting with a simple:
=ROWS(BYROW(SEQUENCE(99994), LAMBDA(x, AVERAGE(x))))
by adding one more x the following would error out so even the length of strings matters:
=ROWS(BYROW(SEQUENCE(99994), LAMBDA(xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx, AVERAGE(xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx))))
doubling the array brings no issues:
=ROWS(BYROW({SEQUENCE(99994), SEQUENCE(99994)}, LAMBDA(x, AVERAGE(x))))
but additional "stuff" will reduce the output by 1:
=ROWS(BYROW({SEQUENCE(99993), SEQUENCE(99993, 1, 5)}, LAMBDA(x, AVERAGE(x))))
interestingly this one runs with no problem so now even the complexity of input matters (?):
=ROWS(BYROW(SEQUENCE(99994, 6, 0, 5), LAMBDA(x, AVERAGE(x))))
and with this one, it seems that even choice of formula selection matters:
=ROWS(BYROW(RANDARRAY(99996, 2), LAMBDA(x, AVERAGE(x))))
but what if we move from virtual input to real input... A1 cell being set to =RANDARRAY(105000, 3) we can have:
=ROWS(BYROW(A1:B99997, LAMBDA(x, AVERAGE(x))))
again, it's not a matter of cells because even with 8 columns we can get the same:
=ROWS(BYROW(A1:H99997, LAMBDA(x, AVERAGE(x))))
not bad, however, indirecting the range will put us back to 99995:
=ROWS(BYROW(INDIRECT("A1:B"&99995), LAMBDA(x, AVERAGE(x))))
another fact is that LAMBDA as a standalone function runs flawlessly even with an array 105000×8 (that's solid 840K cells)
=LAMBDA(x, AVERAGE(x))(A1:H105000)
so is this really the memory issue of LAMBDA (?) or the factors that determine the memory used in LAMBDA are limits of unknown origin bestowed upon LAMBDA by individual incapabilities of:
MAP
SCAN
BYCOL
BYROW
REDUCE
MAKEARRAY
and their unoptimized memory demands shaken by wast variety of yet unknown variables within our spacetime