I'm not entirely sure.
You could try testing with another ftp client and see if it too is limited to 2000 files. If it works then it might be an unknown bug that we're not aware of.
I've tested FlashFXP with a couple sites that contain folders with more than 2000 files and it worked as expected. None of my test servers are pure ftpd but the results should be the same. It's hard to say for sure without testing a pure ftp server.
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