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It makes sense to have some kind of limit to prevent abuse, otherwise Reddit (or other sites) may be forced to ban the SimpleLogin domain if it becomes a source of spam. It would be similar from an email provider preventing you from sending spam from their domain.
Unless you are verifying DNSSEC, they could intercept any outgoing DNS queries and replace the response with whatever they want, if you are using DNSSEC they won’t be able to modify the responses since they can’t create the signatures, but they could still send queries to their own server instead of your chosen server. With either of these options they can still see what you query. DNS over TLS or HTTPS is a way to prevent all of these things, since with those you know the endpoint of your HTTPS connection is the actual server with the signed certificate and the connection is encrypted.
Edit to add: it shouldn’t matter what DNS you use to look up the IP of the DoH/DoT server, because only the real servers should have the correct private key.