No support for more than 4 controllers
Seems like Proton can't read more than four controllers at once, regardless if they're recognised by Steam or the underlying OS. Native Linux apps, conversely, not only handle multiple controllers, but also accept input from every one of them just fine, which is why I believe it's a Proton issue specifically.
Shown here is the Quake II rerelease running on Proton 9.0-4, with Steam Deck's own controls, and eight external gamepads plugged in.
I can only use the other five controllers if I rearrange them to slots 1-4, anything beyond that number, while recognised by the Steam overlay, does not translate to the game proper. The same issue occurs in DOOM + DOOM II, which also has no native Linux version and also relies on Proton 9.0-4 for compatibility, but is nonetheless listed as "Great on Deck". This also happens on the upstream (Proton Experimental) versions, as far as I was willing to test it.
While I don't have any Linux-developed titles on Steam that can do more than four controllers at the same time, I do have RetroArch and a few assorted emulators. This is RA running with the same setup.
The problem is that Quake (or any Nightdive remaster) does NOT support more than 4 Xinput controllers, it only does 8 if you either do full ps4 controller or if you mix them.