There is no such constraint for working with more than two popups in Test Studio. I'll investigate why the the error message is shown, but from what I can see and checked in your application, event the message is shown, the recording browser is attached to the next popups and steps are recorded for all the open popups - first, second, third, etc. - so it should work fine for you.
Please let me know if there is any other issue with your application recording that prevents you from automating it.
the Telerik team