Background
There have been a number of articles, blogs and comments in various Starfield forums discussing what has come to be known as the Soft Mod Limit.  What has been observed is that Starfield can become unstable and start to exhibit a wide variety of aberrant behaviors as one starts to get more than about 100 to 120 plug-ins installed.

To understand the issue one must first understand the three types of ESM files that one can use for a plug-in and the notion of an ESM Form

ESM Form
Forms are how ESM files record and manage game information.  One can think of a form being an index card that one can use to record a collection of information about something in the game.  Every quest in Starfield is recorded as a form (sometimes more than one as it turns out).  Each type of ship weapon is recorded via a collection of forms (a COBJ form that indicates cost and availability, a GBOF that records most of the basic stats for the weapon, a PROJ form that records information about the weapon's projective, etc, etc, etc).

Many plug-ins modify aspects of how Starfield works by providing an altered copy of some form to replace the one found in the base game.  This is called overriding.  This is also one of the primary causes of conflicts between plug-ins and between plug-ins and updated versions of the base game.  This is also what gives rise to load-order dependencies between plug-ins.  If multiple plug-ins are overriding the same form, then the final version of that form is determined by the plug-in that is last in the load-order.

It should be noted that one of the primary design objectives of Ship Builder Configurator is that it does not override any forms or scripts

Full Master ESM
This is the classic form for a plug-in and many plug-ins still use this form.  Full Master ESM's can hold the largest number of forms - up to a bit over 16 million (2 ^ 24).  But Starfield can only load 253 such plug-ins.

Medium Master ESM
This type of ESM file can hold up to 65,535 forms and Starfield can load up to 256 such ESM files.

Small Master ESM
This type of ESM file is limited to 4,095 forms, but one can load up to 4,096 such ESM files.

Root Cause
The best investigations that I've seen on this topic would seem to indicate that the issue arises from arcana regarding how plug-ins are loaded when one plug-in overrides forms from some other plug-in.

When a plug-in is loaded, it will consume at least one index slot for its type of ESM (Full, Medium, Light).  However, if the plug-in overrides forms from the base game or from other plug-ins, then it consumes additional index slots.  One of the more detailed studies that I have read suggested that the number of extra index slots consumed was equal to a count of the number of other plug-ins for which this plug-in overrode at least one form.  So if one's plug-in overrode no forms, it would consume 1 index slot.  If the plug-in overrode some forms from the base game, some forms from plug-in A and some more forms from plug-in B the plug-in would consume 4 index slots.

The Soft Limit problem arises when one has consumed all the available index slots.  Since each plug-in will consume an unknown number of index slots, one cannot predict exactly when the issue will start to manifest.  For example, if all of one's plug-ins are Full Master ESMs, and each one consume 2 index slots, one will exhaust all the index slots after loading 126 plug-ins.  If one's plug-ins are consuming more than 2 index slots on the average, one will encounter this limit with a smaller number of plug-ins.

The problem was apparently compounded by a bug in Starfield from versions before 1.14.68.0 that prevented one from installing more than 254 mods irrespective of whether one was loading light, medium or full ESM plug-ins.  This bug was apparently fixed in 1.14.68.0 (see Starfield Update 1.14.68) but one can still encounter the Soft Mod Limit depending on which type of ESM file one is loading.  If all the plug-ins that one is loading are Full Master ESMs, then there are still only 253 index slots available despite the fact that there are plenty of other slots available for light and medium ESM masters.

Recourse
The only known remedy for solving this family of problems is to reduce the number of plug-ins that one is installing.

For older game, such as Skyrim and some older versions of Fallout, there were tools/techniques for merging multiple ESM files into a single ESM file, which would help with this issue.  Unfortunately, there does not appear to be a tool for merging Starfield ESM files together at this time (10-20-2024).

References
Below are links to a handful of blogs that discuss the Soft Mod Limit and what appears to be causing the effect:

The Current Mod Limit
Starfield Still Not Loading More Than a Set Number of Mods
Mod Limit from 110 Still an Issue?
Important Information About ESM Files
Starfield Engine Fixes - SFSE - see the article regarding Deep Scan Load Order