So perhaps either a redo of your SP settings might be in order, or else try removing the link between the two mods. What could be interfering is StoryProgression though. So, starting with MC then since this is the simplest. Doesn't actually allow or disallow anytihng about household size on its own. SP has its own household cap that can be found under Household Caste, Town Options PortraitPanel: Opens up more slots on the portrait panel on the left side of the screen.

StoryProgression: Allows inactive households to overstuff themselves and to hold together if an overstuffed household is switched out of to make a different household active. If anyone could please help me figure this out, it would be greatly appreciated! It changes nothing about gameplay. I believe I have no mods that interfere with getting more than 8 sims in a household. I have looked through all of the settings for each mod to make sure each allows more than 8 sims in a household.