Agreed on what you mentioned above, and I believe I did answer my own questions. Per ChatGPT and your thoughts, this seems to be a limitation in the Zigbee protocol itself. It's not eisy's fault that the Zigbee protocol has that limitation. I had only moved 2 hue lights over to the direct Zigbee connections when I realized that I would apparently lose all of the hub and app functionality. So I removed the 2 lights and have them back under hue hub control and through the Polyglot hue plugin.
In the end, using the Polyglot hue plugin approach allows you the both of best worlds so it's hard to move away from it. If you migrate to the eisy Zigbee control, you lose the hub functionality and pretty much the functionality of every single hue app on the app store and google play store (they all require the hue hub for communications). To recognize the impact, just search for "hue" on the app and google play stores and there are easily hundreds of Philips hue apps that require the communications to use the Philips hue hub. If we move to eisy Zigbee control, we unfortunately seem to lose all of that I believe which is one of the main reasons folks use Philips hue is because of the software/app availability. It's definitely not because they are the highest quality. It's unfortunate given the eisy is far more powerful it seems and makes it so much nicer with more direct control of your Zigbee hue lights. In contrast, the hue hub has very low horsepower, very low memory, significant limitations on the number of devices, and slow communications speed to the devices. The fact that there is essentially no way that I can have 40 bulbs unless I have two hubs demonstrates that. Philips could build a better more powerful hub and they essentially have not for so many years. However, I believe the Zigbee protocol itself is part of the issue on these limitations.
Philips finally just released the long awaited ability for two hubs to be controlled as one in the hue app. I've combined them and it broke everything in the Alexa hue skill control since Alexa does not seem to support that quite yet. This is one area where the eisy Zigbee control shines I believe. You do not need two eisys to control your Zigbee hue lights I assume. Again, you would lose all of the above though if you went that route.
For now, I'm forced to go with the Polyglot hue plugin to get the best of both worlds (and not lose functionality from hundreds of apps). Hopefully the plugin will be kept up to date with updated hue functionality which is a concern given it has not been updated since May 2022 as of today. To note, I'm not saying the plugin is bad by any means at all. I greatly appreciate the developer's significant accomplishment with this complex plugin. I literally use it daily, and I have it connected to insteon keypad switches throughout my entire home. It does have issues such as the need to restart the plugin after power glitches and such, but overall it's a nice plugin. However, direct eisy Zigbee control is generally better with color slider controls and other benefits. Maybe someday there will be fundamental changes or a better workaround that provides a path to allow multiple source control for Zigbee devices. Either way, it's comforting to know that at least Universal Devices's vision and the eisy device supports both approaches.