there’s a thread that pointed out that the limit might’ve been increased to 10 since the island’s name in the direct was Nintenland; but during dialog, it was shortened to Ninten so i’m not too sure if the character limit has entirely been confirmed, yet
the character limit was definitely at least 10 characters long. in the japanese direct it's called Ninten with the character for island as a suffix. this is a play on words as it would be pronounced the same as "nintendou" AKA the company's name. overseas they romanize it without the u syllable.
however the other featured town's name was Nintenland. we also saw someone from Acorn and the japanese equivalent. they specially craft the towns in the directs and promo material to be shown off. it's pretty clear we'll have at least 10 characters this time around.