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Could you send an email to each recipient rather than 1 email with many recipients? The email tool will send an email for each record input. You could achieve this by adding a Text to Columns tool on the recipient list field, configured with a semi-colon delimiter, and splitting to rows (then updating the email tool to use the new field).
There isn't any documentation on a character limit, but from your testing it sounds like that may be the case. I would send that information to support@alteryx.com, and proceed with a workaround for the time being.
I'm experiencing a similar problem; for me the character limit appears to be 264.
Mine is also truncating at 264. So frustrating. Did you ever contact support or determine a work around? It makes no sense to me why this is happening.