Unlimited! Except for passwordless credentials, which do consume storage space aboard the device. But second factor (U2F style) credentials are stored encrypted on the server, so there's unlimited "space" for them.
For U2F you're right that it becomes single factor if you use the device as the only factor. With FIDO2 (which is what makes passwordless available), however, the device supports a local PIN as the "something you know" factor - and it's also a better kind of knowledge factor than a traditional password since it's never sent over the network.