Why instance devices have limit in density?

The limit of 1 is due to details of the internal implementation. Allowing this to go above 1 would essentially be just automatically setting appropriate fractal layer parameters for you - which might be useful for sure, as an aid, but would not be a new unachievable result.

Why can’t you use layers set to lacunarity 1 to achieve your increased density? That is exactly the approach I used in the recent example in the other thread to create lots of mountain ridges (Influence Noise to flow in general direction - #6 by Stephen)