There is no such general limit — though I see the THREE.Color documentation is incorrect about this, and will need to be updated.
In some contexts where you might use a Color instance, values outside 0–1 would not be valid. For example, MeshStandardMaterial#color represents something more like a reflected fraction of incoming diffuse light, and values >1 do not make sense. But MeshBasicMaterial#color is not so limited, and many RGB color values throughout the internal rendering process will exceed 1.
For more on this see the color management docs, particularly as related to the “open domain” working color space.