what is the Maximum allowed size of the Docs while uploading a Wordpress theme?
It’s not stated but better to keep it smaller
I think there’s no exact limit, so just use a common sense.
Both small and large docs will offer their own benefits, of course. Small documentation will be easy to read and follow, but it might not cover some important features of your item. Large documentation will probably explain every single feature your item has, but it will be more difficult to understand in most situations.
However, as long as you don’t put some big images or video files inside documentation directory, you should be fine, no matter how large your documentation is (because plain text doesn’t consume much space).