Alright after some testing here are my results:
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For Squad battles with AI enabled, battle size of 30-40 squads per team should not be exceeded.
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For Lone Fighters with AI enabled, battle size of 100vs100 should not be exceeded. A smaller 75vs75 or even 50vs50 is even more recommended.
Going above these numbers resulted in micro-stutters, connection interruptions, desync issues.
The same applies to battles without AI, as desync will be a problem just like in battles with bots