Greetings!
When I think of “yet another limit construction topic”, I remember when years ago I (and others) asked for Thrall limit and it did not seem like a practical solution. And it is a reality now!
Since I started playing on official Siptah servers, I can tell a difference on building’s size compared to Exile Lands.
In general, buildings are so big that it will take considerable time for the PS5 to render all of them, or they will make PS4s crash.
There is so much light and so many placeables that most buildings look like theme parks.
The space “saved” with low tier blocks is like no one I have ever seen before.
So, I could just report every building I meet that, to me, is out of proportions so that Funcom team can evaluate them. And, trust me, that would be a lot of reports! Or we can think on a friendly solution like the one with the Thralls: let players know a limit.
I believe players and clans should have a limited number of construction blocks and placeables allowed. Numbers are not subjective.
It should be granted to active players as well, so clans of ghosts will not be an option to let single players build server-killing-buildings for one or two people alone.
I know you know this has been suggested many times and comes with cons and many caveats. I’m not going to rehash it as I know others will.
It has been suggested to use an alternate system that also addresses decay, such as VRising.
Is it a matter of reluctance, status quo, work involved? Hard to say.
Perhaps this is the direction, although arduous and complicated as it is, that they want to continue on.
There are a lot to consider in building limits. I believe that the suggestion of a flag system like @CodeMage suggested some time ago (i wish i could find this post) is more and more the actual solution. So everything you build away from this flag will have really fast decay no matter the materials. Because it is viable to build a wheel there, or a tp stone or whatever like an outpost. But the fast decay would make you remove it your self, since you don’t use materials anymore when collecting back your building pieces. Then this “flag” system would work as a magnet too! If by accident you placed a thrall in a place and you forget it, then the thrall, pet, horse whatever, would return alone to your base, so it would solve the stray issue too. Or… How many people free thralls from cages and abandon them. This flag magnet would drag them to the base and simple as that, no more trolling! Last but not least? The long distance call to your thralls and the order return home to the ones we don’t need to follow us anymore!
But let’s go back to the building issue! Your radius distance that will be created will have 2 measures. 1 how far you can build, 2 how close the others can build. This would destroy the new troll meta between players to build close to others and purge hitting and destroying others than the build that accepts the purge.
A building limit alone cannot solve the issues that we have and probably won’t solve anything!
Here we go again 
I usually get cranky when I see this suggestion, because it has been proposed so many times and I always have to explain the same things over and over again, but hey, I’m on vacation, so let’s go down the rabbit hole again 
And it didn’t end up solving the problem it was supposed to solve. Many of us thought that the followers were the main culprits for official server performance problems, and those problems didn’t go away when the follower limit was introduced.
Mind, when I say “those problems didn’t go away”, I’m not setting up an unrealistic expectation of servers running perfectly smooth. No, what I’m trying to say is that the performance improvements from follower limit didn’t justify the “cost” of having to deal with the limit.
True, you couldn’t run into a theme park with 400+ thralls and pets crammed inside it, but the overbuilt servers kept soiling their beds and crashing just like before.
So now we have a game mechanic that actively punishes people for forming clans – because of the follower limit formula – and for what? For something that is better solved through server moderation.
We could keep playing Russian roulette and say “introduce another limit, this one will surely fix the problems”. Or we could ask for server moderation to be improved.
There are two problems with that idea. One is that the follower limit is not “friendly” in any way. I already explained why.
The other is that while numbers aren’t subjective, they do need to have a purpose. The problems you mention don’t happen because someone has a certain number of building pieces or placeables, but because of the way they are used.
Unless you set the limit so low that it cripples pretty much everyone, you won’t avoid having those problems.
In short:
As for alternatives, I think an upkeep system might be somewhat helpful when it comes to performance – and also help deal with serial refreshers – but it also won’t solve the problem. The only way to solve the problem is to moderate the servers. Players won’t self-moderate, so someone has to… help them 
As I have said before in the past, it is a hard, resounding NO from me to any and all building restrictions. The majority of players on officials should not have to have their own play experienced diminished, dampened or burdened by restrictions because a subset of the players cannot behave themselves. If you would like to have active building limits in place, then I recommend you find a good private server.
No Building Limits
selling alot of pleaceables in bp and baazar limiting their use dont looks profitable. An area limit to claim, like in a radius and an upkeep to maintain building would help a lot.
Why do you say that like as though it is a good thing? Just because it is reality doesn’t mean the thrall limit isn’t still bad. There was never a single moment in time since the announcement of thrall limits until now that server performance improved.
Although the limit didn’t take effect until much later after the announcement, everyone was scrambling to delete their least-important thralls before the limit to save their best. Within a couple weeks after the initial announcement, most of the excess thralls were gone, and it did absolutely nothing for performance.
Numbers aren’t, but the meanings you derive from them are. This is a fundamental failing of every single one of these “building limit” topics.
The numbers of pieces you build with isn’t the issue, what you do with them is.
Do not get me started on thrall limits, I fought long and hard against it, knowing it was just another FC false flag operation. It literally fixed nothing.
I think the main issue is as you mentioned, PS4/5 is being overwelmed in a graphical sense.
That does not mean that people with better systems should suffer another downsize nerf, which is basically what thrall limits were.
Introducing more graphical settings for console players would be a better option IMO.
If a base is causing a performance hit on the client or server on an official server, report it. Limit imposed.
Client side lag is a terrible measure for anything.
Not on ps4 per the original comments. Client side lag for them is fairly fixed so all an investigator has to do is check it with a stock ps4. On pc yeah, its much more fungible, but a console is a console is a console. Its the beauty of them.
And those servers are shared with PS5 players, are they not?
The greatest issues before and after 3.2 was and is the official servers and the single player that had and has old data. Private servers was running really good. I spend most of my time pn private servers from 3.0 to 3.2 for this reason. Ofcurce when i deleted my old data on single player i had a performance that i didn’t have for years now and i enjoyed the hell of it. Official servers now are crashing less for ps4, but surely the fear of crash is reduced significantly. I can pass from big buildings now without certain crush, but the lag… Leave it be, yet it’s ok. I don’t see however how ps4 can pvp under these circumstances.
But the improvement is huge in official servers comparing 3.0 and 3.2
They are but the game is run on ps4’s so the ps5 players have to recognize they share the space. On officials, build modestly and always remember, everyone is a guest. A guest who can be kicked out of the party at a moment’s notice.
To be honest, you’re not wrong.
However, the size of someone’s build can exceed what is reasonable long before it causes lag. People need to remember that they are sharing a server not with potentially 39 other players. But potentially hundreds. Not everyone logs into a server at the same time every day or the same day every week.
Client side lag as a measure would only make sense as a metric if there was a sign up process for officials and they had a limited number of slots in a whitelist where they would reject anyone beyond the limit. That’s not going to happen though. So the limits are much lower.
Like turning lights out unless you are really close to them?
I’m not arguing people shouldn’t be considerate when building. But you can’t effectively avoid crossing a line when you don’t know where that line is.
Like you said, this is indeed a bigger issue for PCs. But that doesn’t mean it’s a good assessment tool for platforms either.
This isn’t directed towards you, but I get a sense from some folks that “the TOS haven’t been a problem for me(yet)” so they’re perfectly fine the way they are. And I disagree heavily with that.
So… get to work then? 
Also, if you search the forums for building limits you will have like… idk… a month’s worth of reading material discussing in detail every possible pitfall and in general concluding that it will not solve anything…
Short version is that someone can cause more issues with a 50 block limit than another person with a 50k limit… so yes… a building limit WOULD solve all the problems… but in order to make any functional difference, you would have to set it like… below 50… so that everyone can build a tiny hut and not affect performance “too much”.
That will still make room for those evil doers who would use their 50 blocks spread on a huge area simply to block as much land as they can to spite others… and you’d still have the idiot who’d build a tiny shack and use the rest of the pieces to stack torches to create a “lag trap”…
Soooo… what did you really solve?.. nothing… but at the same time you sacrificed pretty much the whole building feature of the game… it still will remain an admin issue of players not respecting the official server guidelines and thus needing to be wiped and banned 
That’s about it really…
i think that building limits would be really bad but if it prevents even one player from being banned then i would support it.
Other things that cause lagg -
Thralls - big bases can be ok until thralls and torches are added.
Players - yes some players do make the game laggy maybe reduce servers to 30/30 (yes a really bad idea)
Anyway Funcom already have a solution to building limits, they just ban everyone.