SharePoint recommends a maximum of 2,000 lists and libraries per site, and 2,000 subsites per site. These have been long standing limits for SharePoint but have not been formally enforced.
There have been cases where some sites exceeded these limits, resulting in poor site performance and low-quality viewing experience. One of the most impacted areas is the API performance that degrades significantly when users access data on the sites that exceed their recommended limits. The API calls may time out or get throttled, blocking the users from opening the site or resulting in unexpected failures. In some extreme cases, the issue can impact functionalities beyond these sites.

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Originally posted by Microsoft
Jul 27, 2022
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