The limit itself was removed in this PR: https://github.com/gohugoio/hugo/pull/8172.
If you receive a "file doesn't exist" error with a path listed, do take note that the path is the last one checked by the function, and may not accurately reflect your target. You should generally double-check your path for mistakes.
-Note that there is a 1 MB file size limit.
-
For more information on using `readDir` and `readFile` in your templates, see [Local File Templates][local].
[local]: /templates/files/