Benefits
The benefit to a limited palette is uniformity. I think it's very good for all artists to be able to use one. To know enough about color mixing to make a few colors work.
The down side is range of hue etc. Too much color-too much over-use of colors can make a work "hard to look at" - busy & garish. I like to have as many options as there are and then use judgement in their employment. My palette is different for every subject. I own 60 or 70 hues and admixture (hues) but use only 12-16 for most pictures-less even for some.
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