Streets of Rage is a 320 wide game, which should mean that it had a 20 sprites per scanline limit.
Yes, but the sprite scanline buffer is still just that of the width of the screen. The buffer is 1.25 times larger and there is 1.25 times more sprites per scanline, but the pixels per scanline for the screen are also 1.25 more dense as well. What that means, is that 32 pixels in low res mode takes 40 pixels in high res mode. So to get the exact same output 'width' as a low res, you need more pixels. Both systems aren't going to be hitting their SAT entry per scanline limit before they would hit their scanline sprite pixel buffer limit. Genesis could have 20 sprites per scanline if they were 16 pixels wide (or less) for 320 res mode (or H40 as Sega labels it). That's it. So you could have ten 32pixel wide sprites per scanline, but those 32pixels are going to be a shallower width than low res 32pixels. For the same width you'd need ten 40 pixel wide sprites, which means you only have sprite bandwidth for 8 objects with that corresponding width. Which is exactly the limit of low res mode for both system.
The higher res H40 mode is more optimizable for sprites of
in between sizes, or more smaller/tiny objects per scanline. Where a pixeled image might push over into the next cell segment for low res (and coarser sprite cell size of the PCE), could be optimized to take less relative scanline bandwidth ratio to the real output width of the image. I.e. less sprite core cells, thus less bandwidth for the sprite scanline buffer.
There isn't slow down with eight or twelve character sprites, there is slowdown when there are juggling enemies on screen and 8-12 character sprites on screen. I haven't seen anything like it on a console. But, I bet most people just call the special car bomb attack whenever that much action is going on.
Yeah, what comes to mind is the axe juggling guys that cause the slowdown (with less than 8 characters on screen. SOR1 we're talking about here). But it's not like the game was plagued with slowdown, like I remember Final Fight on the SNES being as such.