Looks as though that's due to the same root problem as the Switzerland 256 problem, except using a 9-bit system instead (111111111 in binary is 511 in decimal).
Yes, all digital systems have such limitations. Just like the limited number of IPv4 addresses due to the use of a 32-bit number.
But as far as I know, the BR network did not have any restrictions on the number of axles in a train formation, as the powers that be considered that there would never be a train on the network with 512 axles.
It was fun when a train ran using the reversible signalling, then as it entered the axle counter section the count would go from 0 to 511, then 510, 509, 508 and continue counting down etc..
Of course, if you use ten binary bits, then the maximum count approximately doubles to 1023. And if you use 16 bits, it’s then 65535 axles which is I think what modern system use.