Limitations when adding new users

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WordPress doesn’t have any real limitation to that although your wp_users table may not be optimized and the queries to it become slow. Try doing this:

  1. Repair and optimize your tables
  2. Add Indexes to frequently used columns such as user_login or user_nicename and play around until it speeds everything up a bit

You may also try disabling plugins one by one just in case there is a badly coded WP hook/action.

As a final solution, I would add a huge list of users directly through a SQL query, that way you can add thousands of them in less than a second.