Well yes, the size of the disk limits how many files you can have. Since FAT12 has a 16mb filesystem size limit, and a 4k cluster size, it's obvious that you won't get a million files in the subdirectory. OTOH, the only limitation is when you run out of disk space, which would be around 4000 files on a maximum sized FAT12 partition.
Was there some point you were trying to make, or do you just always have to disagree?
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