OK?
A drag race involves multiple vehicles, usually 2 at a time, racing in a straight line over a pre-determined distance, usually a 1/4 mile.
A straight line.
I can careless if there was a car that made it down the 1/4 mile in 3 seconds and makes 3149876589216531879264897 horsepower, because it still doesn’t interest me any, and I would still tell people that I don’t give a shit.
Most HP restrictions that road racing sanctioning bodies have usually involves a cap on a HP to weight ratio, so you still can make 500hp over your rivals if you wanted, you just have to make your car heavier to stay within the rules.
So yes, there is a cap, technically, but it’s not like you can’t build a 2000hp engine for a car to run in a road racing event if you really wanted to.