I understand the limit on the number of students, but the subject limit seems pointless. XP is still split between the subjects so it's not really helping you, but what it IS doing is simplifying scheduling.

Let's say you want to teach eight subjects and you have four hours to do it. So you put two classes together - four students, one teacher. You have two hours dedicated to the first four lessons, two hours to the next four. No penalties. Good.

OR, you could just schedule eight classes into the four hour block, without penalty.

By the end of the four hour block, their XP gains in every subject should be identical to the two two-hour split blocks.

All this does is make scheduling harder than it needs to be.