I’ve talked with Kian about this multiple times and we had https://github.com/paritytech/substrate/pull/10340 but unfortunately it didn’t make it.
Basically each validator have a staking amount cap (or else the reward % will decline) and each nominator have a nominations cap. This essentially creates a staking cap per each individual address. In order to workaround this cap, the Karura Liquid Staking protocol have to split the staking into multiple sub-accounts to ensure the staking optimal rewards.