Causes problems with command prompt, flump, etc. - is this fixable? Could try to find nearest still-existing parent, or maybe jsut go back to the root view.
No reason not to have unlimited favourites. (Aside from the UI for managing them! - but that could be fudged with b2 style context menus, without needing a Firefox-style bookmark management UI. Manage bookmarks > <<your bookmark>> > Delete, that sort of thing...)