The above command line argument limit-card-insert-tries n (or the version in the config file) should limit the number of times a smart card is being asked for to n-1.
The option has no effect at all.
This effects me in the following usage pattern: I have a file encrypted with two different public keys. One of those is on a yubikey (smartcard). The other key is on a tpm. When the yubikey is missing, I do not want to be asked to insert it. I want to be asked only about the second private key password.
Alternatively, I'd be happy if the file will be decrypted without a pinentry dialog if any key is already available to decrypt.