As title says, cap is 250 for friend entries.
I would call it a bug not like there is any ingame text explaining you have hit the cap… aka too many steam friends and you add their alts… just fills up… over the years.
The effect is if you ask to friend someone, and they accept. On my end I get that they cancelled it, but they get it as accepted and also get me added on their friends list. ( No entry on my side )