I added the milk materials into the sheep, plus new milkable tags for each milk material, on an otherwise unmodded world. It looks like only the last milkable tag will be used, so I'll cut out materials and generate new worlds as I go along.
At embark and when in-fort, the sheep produced unknown creature substance.
with all 257 instances

200 instances produces a specific goblin's tears?

128 instances worked

I jumped down to 128 instances and it seemed to work. Though I don't know the exact point the materials started working again, or even how many materials a sheep has by default. Either way, I'll just break up my generic animal into several generic animals.
I did some testing with a modded copy of the flesh ball, giving it 257 "flesh"/meat materials. The flesh ball doesn't use body detail plans to mass-define materials, and the embark screen (in v50/Premium) showed meats up to "flesh ball flesh 200". I then added three materials for skin, leather, and parchment, and this caused the number to drop to "flesh ball flesh 197". So 200 seems to be a number of importance. In theory, this could be a number separate from the actual limit of materials, a limit to how many show up in the embark screen.
That said, as I actually embarked and got to the stockpile screen, it too also shows only up to 197 (plus the skin, leather, and parchment). Consequently, if the material limit is something other (how do you test that - by butchering a really large animal?), then 200 is still the limit you're usually interested in. Anything above that seemingly won't appear in the menus. This might differ between v50 and v0.47 though, as I did not see any unknown substances.