Yes, so you use multiple strings (in a single record) if you need longer values:

"first 255 bytes" "second 255 bytes" "etc"

DNS clients combine the 255-byte strings back into a single string.

> DNS clients combine the 255-byte strings back into a single string.

No, DKIM clients and SPF clients do that. Generic DNS clients, however, are in theory free to ascribe any semantic meaning they like to the string separations.