Decription not Limited

The limit is for number of words not for number of characters:

https://docs.simplecalendar.io/event-template-tags/

I tried limiting to 20 words on all calendars (displayed is a grouped calendar) and the entire description is still shown.

If you are trying the [description limit="20"] within the grouped calendar event template then it will not work. In a grouped calendar all of the event templates come from the event templates of the single calendars.