Hi,

You can use this module from OCA.It lets you define the number of records to be shown from settings.

https://apps.odoo.com/apps/modules/16.0/web_m2x_options/

Hope it helps

Try this for limit and ordered records,

@api.onchange('many2one_field')
def limit_many2one_records(self):
    limit = 5  
    limited_records = self.env['related.model'].search([], limit=limit,order='order_field')
    return {
         'domain': {'many2one_field': [('id', 'in', limited_records.ids)]}
        }