Interesting.
Here's what I found out by trial and error. My 200gb card hits the wall at 137GB. There are 1300 files in 33 folders on the card, which rules out the 16000/8000 limitation. Beyond 137GB new folders can be created and files added to them on the computer no problem. The files and folders do show up on the PD when browsing in folder mode. However, when playback is attempted an "invalid file" error is returned and sometimes the PD locks up which requires hard reset (press & hold Vol+/Vol- simultaneously).
The tracks and albums corresponding to those files and folders are NOT listed at all in library browsing mode (albums, songs, artists, etc.). <--- This is an indication of invalid files that cannot be played.
Basically, any files that are put in newly created "FOLDERS" beyond 137GB is unplayable. The library update is unable to add them to the library even though they are there physically in folder browsing mode. I reformatted the card and started over several times. Same results.
I tested the card with the Cowon C2, D20 and M2. Same problem. Files & folders show up in folder browsing mode but NOT in library mode. When playback is attempted in folder mode, "invalid file" error.
I tested the same card with the original Sansa Clip, Sansa Clip Zip and Sansa Fuze (all rockboxed). All is normal. Everything playback normally. Files shows up in folder and library mode.
This is what works for me. Beyond the 137GB, I dumped all the files to the root of the card. (No individual folder for each album. It's a big mess when browsing in folder mode for those albums. But if I really wanted to I can re-organize everything by renaming them.) Everything works. The PD successfully updated the library. Everything shows up both in folder and library browsing mode. Everything playback normally without a hitch. Because all my files are tagged properly they all are listed properly as they should in library browsing via artists, songs, albums, genre, etc.
Tested it with Cowon C2, D20 and M2. They all work. Right now the card is 170GB filled with 13GB free space. Everything works.