I don't know about kernel builds, but memory pressure is the usual limiting factor when building for macOS/iOS builds when you step up parallelization like this.

Another possibility is system bugs that can be exposed when it thermal limits because it will stop running background QoS tasks, and things waiting on them will hang. It's pretty hard to stress it to that level.

I have done both these things by building compilers on M1. The memory pressure wasn't always from the host compiler but rather tools like dsymutil that may not be perfectly optimized themselves.