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 @a6ff0b2b I added a second user and attempted this in both user accounts.  All windows hidden except for TextEdit.  At 191 windows there was noticeably more delay between pointer movement and window toolbar.  At 346 it became just as unusable as the roughly 800 was before. Window Server is taking only 3.09 GB of RAM this time and the CPU usage is lower, but the lag and jumping is very much present. This is on macOS Sonoma. 
 @a6ff0b2b I dropped it to 302 windows and the lag is there, but the jumpiness is greatly reduced.  I moved it up to 325 windows and it's now incredibly jumpy (as is the Safari window).  A second user definitely seems to lower the threshold. And attempting to drag windows in this state causes an extreme CPU spike. 
 @731bb49a Hold down Option when dragging to remove the jumpiness, leaving only the lag. (Option disables the OS-level window snapping.) 
 @731bb49a A wired USB mouse and two logged in users should get you down to 150 windows for similar lag. It really is a wild bug!