heartseed :
there is no real limitation, it's more a strategy/performance thing.
Some games will be faster by separating mesh in smaller parts, other games by grouping meshs in bigger parts.
In the engine, an entity (MOentity) is linked to a mesh (MMesh), and a mesh can have multiple sub-meshs (the mesh is internally split), so a set with multiple rooms could be a single entity, and be fast if the mesh is split in multiple sub-meshs (for exemple one sub-mesh for each room), you will just not be able to move each part separately in the editor.
From the point of vue of the user inside the editor, loading a mesh file (*.mesh) creates an entity that links to this mesh file, and every entity using the same mesh will link to the same mesh in memory (it's an instance).
In general you should separate the static things (rooms, table, chair...) and the dynamic things (characters, animated objects...) and not have too large entities.