This reason here is similar to why Pose Stiffness only goes so far.
In Ragdoll, limits are “soft”. Meaning that whenever your limb collides with its limit, a force is created to push that limb back. To control the amount of force, you can use Limit Stiffness and Limit Damping. They work exactly like Pose Stiffness and Pose Damping.
Notice how a lower value makes the limit more soft, and a value of 0 is equal to not having a limit at all.
In a more realistic setting, there will be many more limbs and some may weigh a lot more.
Notice here that when I increase the density of the top-most limbs, suddenly the limit struggles to keep the limb within the limit. Like for Pose Stiffness, the solver Iterations and Substeps can help Limit Stiffness reach greater values.