House Rule I should have thought of before

If everyone and their aunt is running around hyperspecialised in a game, then yes that´s grossly unrealistic, or if players are just using it to get access to higher levels from their starting point.
But restricting specialists from existance is just as unrealistic.

So because you prefer to dump the power level sluglow, you claim that my dislike of UNREALISTIC limits, is unrealistic... How... interesting.

Either you have SOME sort of XP source, or you do not. As RAW limits to books is level 20 and 8 respectively, those are the levels you can have a decent XP source of as long as you don´t specifically go the extra distance to nerf your game.

Nope. The master having a few tractatus extra in a single Art, perhaps her speciality Art, will work plenty well enough.

Eh, no it isn´t because that´s not how i usually play characters, and it´s not how most players here play characters. Furthermore, as i already said, "cherry-picking" usually refers to optimal choices, heavy specialisation is the opposite of that!

Shall we go for a simple example?
All unmentioned Arts at level 1.
Say we want a big scary fireflinger. Ok, your "cherry-picked version" uses 120XP to reach 15 in Ignem and has a Casting total from Arts of 16 for CrIg and 2 in everything else...
Now then, my preferred version, split the big XP chunk between Creo and Ignem, getting 10 in each with 10XP left over. Now you have a Casting total from Arts at 20 for CrIg, 11 for any other combination using Ignem or Creo(that´s 13 combinations) and you have a higher maximum casting total.

Ok then, lets add an Affinity for Ignem to the mix and go a bit more specialised shall we?
Your "cherry-picked" version then uses 140XP to reach 20 in Ignem, for a Casting total from Arts of 21 for CrIg and 2 in everything else... Yes, yes very munchkin i´m sure!
My preferred version, gets Cr 10 and Ig 15, at 55 and 80 XP respectively, leaving 5 XP less used than than with your cherrypick. The Casting totals now ends up as 25 for CrIg, 16 for any other Ignem and 11 for any other Creo...

Ergo, by the very definition of either "cherry-picking" or "munchkin" or "power level" or whatever you want to call it, allowing highly specialised characters is most certainly is NOT it. Because you can always manage to get a more powerful character by NOT overspecialising... However, concept characters that are overly specialised can often be fun, which is why i consider artifically removing them is a BAD idea.

So an Art limit of 12, rather than 10, would no longer be lowish? That's 78XP, and about 60% lower than the 15-limit that many people seem to enjoy.

Your example against over-specialization is to show how a character who specialized in a single Te and a single Fo can do a single thing better than a character that specializes just in a single Te? Um, okay, you win against the strawman you've constructed.

Note that improving Creo would cost 11 xp and Ignem would cost {11 * 1.5 = 16 xp} 11 xp also. Proof that this is the perfect balance.

These kinds of specialists while interesting are also self-limiting. Someone with an Art of 12, straight out of gauntlet has spent nearly 1/3 of their apprenticeship on that art. Many other things will suffer, there are about twenty other things to spend their remaining xps on. And arguably, Latin and Magic Theory would command the lion's share of what remains. Even limiting Latin to 4 and Magic Theory to 3, that's still 80 xps. So out of 240 xps, 158 are spent (50 for Latin, 30 for MT, and 78 on the Art). 82 xps to spend on Finesse, Penetration, Parma, OoH Lore (which some players might consider optional, but it generally has consequences, and it also makes sense a specialist skips this skill) and 14 other Arts.

Such a character has much more story potential, for example how does he overcome his lack of skill outside of his specialty? Can he think out of the box and solve all problems within his specialized area? He has to form alliances, because as strong as he is in one area, he's incredibly week in probably 10-12 others.

In my experience, none of those Abilities should be above 2 unless they are part of your character concept, in which case you wouldn't be going for "Art above 10". Finesse is useless outside of concepts. Adding 5 xp to Penetration is barely cheaper than raising Arts. Parma is good but only taught after Gauntlet and Oath. OoH Lore and Code of Hermes are of limited use outside concept again. That's 20-30 xp only.

Yes, you squeezed Abilities hard to get there, but reducing any score from 3 to 2 still leaves enough juice to raising an Art to 5. Reducing to score 1 raises another Art to 4.

In fact, putting too many points in Arts is anti-munchkinism. It is way easier to find good Art summae than to raise Abilities. You hobble your future character improvements.

I wasn't suggesting that someone split 82 xps evenly amongst all the Arts. I was suggesting that 82 xps have to be split between some necessary abilities and selected arts. I'm saying that even buying those Abilities to 2 is very expensive. And I left out an important one, Concentration. So lets say we spend 5 xp on OoH Lore, Penetration and Parma Magica and 15 XP on concentration and Finesse, we've spent 45 XP of 82, leaving us with 37 left to spend, oh wait, forgot another one Artes Liberalis needs to be 1 so we're literate in Latin, we're now down to 32.

My point is specialists, while useful and interesting to play our of gauntlet, do not break the game. If they are strong in one area, the are by necessity weak in many other areas, and it is pretty easy to engineer stories that allow them to use their strengths while also demonstrating their weaknesses. Isn't that what makes a good game?

On the other hand, generalist characters are generally less interesting to play, because they are so flexible, they can do a lot of things, but none of them well. The specialists can outclass them easily, and they've become the utility magus.

I know I'm running behind here, but I just noticed something that's (somewhat) relevant. Twelve example magi are listed in the core book on pages 24-28. All are age 25, just out of Gauntlet. Of the twelve, six have at least one Art at 12. One (Bonisagus) has two at 12. The other five have Puissant in their specialist Art. The sample characters seem to show that the 'maximum' on p 32 is a suggestion at best.

FM

Not really. All six of those have an Affinity (virtue) for the relevant Art(s), which are then raised to max 12, quite as per the suggestion.
Several also have Puissant (Art), which is how they have such Art scores as 12+3 - which covers all cases with effective Arts higher than 10/12.
For details on Affinity (Art), see corebook p. 40. Puissant (Art) is found on corebook p. 48.

The Limit of 40 for highest reasonable Art is.. perhaps somewhat low if we take Affinities into account, but I believe that these "pre-aged" magi are intended to be slightly/somewhat weaker than played magi.