The max peers count includes the host. If you set it to 1 it is ignored, because nobody would be allowed to connect, defeating the point of using the Multiplayer object. If you set it to 2 then at most one peer can join, since with them and the host it's 2 peers, and subsequent peers trying to join will receive an error saying the room is full.
Don't forget the value is only used from the host. If two peers join a room, one with max peers 5, and the other with max peers 10, the value is taken from whoever became host.