This settings previously referred to the output that was available for the Task output. Now, for the last run, the output is unlimited. You can always write the full output through Variables or read the full output in the Output window.
However, a couple of versions ago we added database logging. For historic output the cap is 2000 characters. This cannot be changed right now. This was set for performance only as output is stored to file->read by server->sent to client. Also, as this feature, "database logging", is quite new we wanted to see all performance impacts before we increase the value.
But if you want to store full ouput you can do this now. You can choose to store it on database or file, depending on Task you choose, only difference is that you cannot view more than 2000 characters in the Task history.