If you don't have the cap remover, the NPCs stop at the limit like you, and do not leave the party. (once Mazzy hits her limit will not let you drop her at all!)
If you do have the cap remover....well, Armisael said he got Viconia up to lvl 30 so draw your own conclusion.
I prefer to leave the cap restriction active to retain game balance, but each to their own.
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