The limit has been removed from master for a while now, right?
First time I tested it, a few days ago, I was going to post and issue right away because I didn't see any warning mark of wasted PPs even if I had not queued any item in the production list. Then I realised there was no wasting because all unspent production gets into IS.
Sly, and to a lesser extent Laenfa, can draw points from the IS at a relatively good pace. With Sly, turn 40, 6 colonies + homeworld, no IS techs researched, subterranean researched, I get to draw around 7 PPS per turn from IS (and growing), which allows for a fair acceleration of coloniser production on far away planets.
I like it this way.
Maybe some percentage of excess production could go to waste, but then we would be again fighting against micromanagement.
My only (so far) unattended game that pitched Sly AI against Egassem and Eaxaw gave a blatant victory for Sly. Interesting enough, this Sly AI played a relatively normal strategy, getting a huge army sooner than the other two AIs. It first encountered Egassem and pwned them hard, while the Eaxaw were confined to a single arm of the 2-arm spire. So I understand that, first, AI handles AI good enough, and second, that the lack of supply is not a problem for Sly. Maybe they are still OP.
Right now I'm playing a game with 2 Laenfas, 2 Slys (one mine), 1 Trith, 1 Eaxaw and 1 Cray, and the best empires so far are one of the Laenfas and the Cray. Both Sly are below average (except my Sly in terms of PPs, which are the best, I'm getting more GGs than the other Sly).
Edit: update for that game, turn 80, 12 colonies plus homeworld, 260 population (got xenological genetics), still no IS techs, I can draw 25 PPs per turn from IS, no planet is ever set to stockpile focus but probably I should because I'm getting too much PPs into the IS (200+ right now), but for now I'll try to stick to industry/research focus.
I think the bubble hull must not be unlocked from start, not even for Sly. A colony base is as expensive as a bubble coloniser (and will be just more expensive once the cost of colony base hull is raised to 3 from 1), which seems so odd, although they require shipyard and orb. drydock first... Having to research the tech first will make more sense and look better balanced.
Funny thing and not related to this thread, I've seen in all my games with Sly that AI hates me. I mean, each empire hates me more than any other enemy. As soon as I colonise a GG in a system with another GG, the nearest enemy will send (unless they can't reach it because out of supply) a fleet of armed ships to stay idle in that system indefinitely (whithout sending anything else), preventing me from colonising the other GG in there until I get military forces or system mines to drive them out. This AI could be conquering natives that are closer to their core space but it prefers to come and bother me. I kinda like it.