Ok, so I tested here and got the same result you did. Then I found this note about Limit number of connections
This setting is designed to be used on RD Session Host servers (that is, on servers running Windows with Remote Desktop Session Host role service installed).
https://learn.microsoft.com/en-us/previous-versions/windows/it-pro/windows-server-2008-R2-and-2008/ee791922(v=ws.10)?redirectedfrom=MSDN
So, I stood up a new instance of Server 2022, then added the RDS Session Host and Licensing roles, then tested the Limit number of connections set to 1 again and got this result when I tried a second RDP session. So may be overkill but that's what it will take to get the end result.
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