There isn’t some software limitation here. It’s more that they only put two display controllers in the base level M-series chips. The vast, vast majority of users will have at most two displays. Putting more display controllers would add (minimal, but real) cost and complexity that most people won’t benefit from at all.
On the current gen base level chips, you can have one external display plus the onboard one, or close the laptop and have two externals. Seems like plenty to me for the cheapest option.