The recent changes removed a lot of constraints on the entity limit, and now it is free to be raised up.
Technically speaking, it is not removed, but it can be raised so high that it won't bother you anymore.
On the screenshot, you can see the game working fine with 120022 entities (almost all of them func_static):
These changes are included in the latest dev build, which can be freely obtained via tdm_installer.
In the end, I set the limit to 65536 entities. I hope you won't