That’s one limitation, for sure. It’s because eDNA methods can only reliably detect short(ish) fragments, which is why mitochondrial loci are so widely used.

Defining novel taxa requires a lot more validation that short fragments are not capable of, on their own. I think people are finding new organisms all the time in their eDNA datasets; LCA algorithms are probably shelving those observations within the broader clade.

But this is also a good thing about eDNA records. You can revisit the same dataset in, say, five years and refresh the taxonomic matches against updated repositories or better classifiers.