You have to ask yourself why the library would become flooded & "unusable". It's an admission that you designed it like that. Why not design it better, so the user experience is just as good for huge libraries? I know that's a huge undertaking, so you could maybe say it's on the road map for early 2023 or whatever, rather than refuse to improve it at all.

This is many people's first interaction with itch. You could make it a better one if there was less of an air of stubbornness. Eventually the biggest "normal" itch users will have libraries as vast as the average steam library, which they'll have build up over time. As their library slowly becomes more unusable, you'll have to start working on a viable solution for this, rather than refusal on grounds that it's so far been designed to be unusable.

This is not that great a solution because then that means someone will then have multiple "libraries" to keep track of and search through for an item, and that may be fine for some but some of us are already juggling enough of that as it is and just having a button to add all would be a really good way for those of us that just want One Library Per Service without the need to spend multiple hours going through and adding everything manually.

Just put a "Are you sure you want to do this" warning page to confirm the decision if you're worried about people getting overwhelmed and doing it accidentally.

EDIT: Also, having taken a few days manually adding the entirety of the Racial Justice bundle off and on last year, I can tell you: My library is still perfectly usable, searchable, and navagatable via your app. So your reasoning that it "makes the library unusable" isn't universal. Denying Some people a simple convenience feature because some others ~may~ (or may not) have an issue with it, even if you can put in safeguards to prevent accidental activation and explaining what they are doing with potential drawbacks, is just... silly.