The maximum number of users you can list as friends is 750. If you have more than 500 friends, only the first 500 will be listed in bold on your Friends list and appear on your Mutual Friends list.
It'd be more accurate to say something like:
The maximum number of users you can list as friends is 750. If you have more than 500 friends, a link will be provided to list the first 500 by using the directory. Friends added after the first 500 will not display as mutual friends even though their entries will display on your friends page.
Feel free to tinker with the wording, just trying to more accurately describe the behavior that actually happens.