The limit of 100 databases on a SQL Managed Instance (MI) includes the system tables. The system tables are the tables that are used by SQL Server to manage the database itself, such as the sys.databases table and the sys.tables table. These tables are required for the SQL MI to function properly, so they cannot be deleted or removed.
If you create more than 100 databases on a SQL MI, you will receive an error message. You can either delete some of the databases or create an elastic pool to manage the resources of multiple databases.