Loyalty works two different ways. For the part about passing up XP you get from your vassals, yes, loyalty caps at a buffed value of around 200.
But, and here's the cool part, for XP you earn yourself from hunting, loyalty has no cap on it. I'll write up something later with some examples in it, but a loyalty value of 200 or above will cause you to pass up somewhere about 23% and 47% of what you hunt for, depending on how high your loyalty is and how long you have been sworn to your patron.
Now, if you think about a 47% passup rate for a chain full of hunters, that's a lot of XP
