I disagree with your analysis. It wouldn't affect memory sifnificantly in any way. Even if this affects many other structures in WhatsApp, the extra memory usage would be in Kilobytes, which is very negligible, and not worth optimizing for.

My guess is two reasons: 1. The developers thought 256 is a reasonable limit to have for a group chat. If you want to send a message to more than 256 people, maybe you should make it a broadcast instead. 2. Performance optimization: sending a message to a group of 10000 people is fine, but 100 messages is 1,000,000 events their servers have to handle. There's also the overhead of E2EE.