Well, in theory you could have 1048576 events, but it's more of just how much memory your jj2 is allowed to have. Some user patches like 1.23 + (I think) patch a few bytes so jazz2 can use more memory. The reason events don't regenerate all the time is actually just lazy programming though, it happens in all levels, but there are also user patches and utilitys to fix it.
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