How many max players a server will be able to handle with it computing all the logic server-side.
Same amount as the slowest machine of all players can handle.
Limitation comes from networking. Updating full state of hundreds or thousands of entities in something so dynamic isn't possible. Instead, simulation will need to run by passing input events and advancing simulation deterministically on each machine independently.
See Age of Empires networking, which had thousands of units active at any time, 15 years ago over a dial-up.