Here is what we received from Dantz:
It is true that Retrospect has a limit per scan of 32,000 files. This matches the limits of the Macintosh file system, though they will address this limit in a future version of Retrospect.
There are a couple of ways to work around this limit on the AWS 95. The best is to use Retrospect A/UX and backup a large drive in segments of 32,000 files or fewer. Retrospect can define folders as "Subvolumes" which act as separate volumes for backup purposes. The entire drive can be backed up this way since each backup session or script may contain an essentially unlimited number of Subvolumes.
Another possibility is to use UNIX utilities such as TAR or DUMP for volumes which exceed 32,000 files or folders.