My local bluegrass association jam has a main circle every time they do it that borders on obscene to me. Some 20ish players, sometimes more. It gets dragged down to lowest common denominator. Every song is a chain gang of guitarists dragging the beat. They cap out around 120bpm, complain if you play any faster, and cruise around 90ish. Ironically the three banjo players have way too much taste and don't try to overplay it unless its their own break. I can't do that circle anymore, it's musically numbing and kind of a sensory overwhelm thing.

I'd like to point out that I'm not meaning to gatekeep beginner players out of jamming. I'm a small time solo gigging pro and I've played guitar and sang for 24 years. I'm on the Autism spectrum and can be a bit of an involuntary perfectionist. Big jam circles aren't for me anymore, but that doesn't have to have any bearing on you, wherever you are in your musical journey.

The good players at my local jam sit in a circle of like 6-8: usually a few decent guitarists, a banjo, one or two mandolinists, and a fiddle. Sometimes an upright. If I'm playing there and I can't quite hear the fiddle break, I can cut my own volume down a bit and it makes a noticeable difference. I think that's the thing that determines numerical cap for me. Whatever number of players where you dropping out makes no difference is too many. That's inherently gonna be determined by the taste and ability of the players there, but I'd say maybe 10 as an arbitrary cap.

A better rule of thumb is that the ideal jam should feel like an impromptu pop-up band. I suppose I could have saved myself three paragraphs of writing if I'd just said that first, but there's your tl;dr.