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By character limit you mean the puppet limit?
If so it's based on the PS4 power, only a PS5 upgrade would allow us to have more puppet in game.
A little tip if you want to have more puppets in one scene: place a puppet in your scene and disable its collision box in the puppet tweak menu. Then you can duplicate it and you will see you'll be able to add more puppets than before! If you still want them to collide after disabling collision, just scope in your puppet, add a cylinder, activate its collision and make it invisible.
I believe you can have 40+ puppets in one scene by doing this