It’s not a bug, and it’s not a damage cap. Your damage bonus from Archon stacks keeps going up.
You just aren’t understanding what’s happening.
Archon stacks grant both a damage bonus (100% per stack) and an attack speed bonus (1% per stack). The damage bonus is it’s own multiplier, and as a result isn’t shown in your sheet stats (side note: this is actually a good thing, you don’t want it to be additive damage that shows in your sheet stats). Your sheet damage reflects a couple of things, including additive damage as well as your attack speed, but not multiplicative bonuses like the Archon stack multiplier.
Another thing to note: there is a global attack speed cap of 5 APS in the game.
This means that as you gain Archon stacks, your sheet damage increases. Not because of the Archon stack damage bonus, but because your attack speed is increasing. Once your attack speed hits the 5 APS cap, your sheet damage stops increasing, even as you gain more Archon stacks.
However, you still gain increased damage bonus from the Archon stack multiplier, since that was never shown in your sheet stats to begin with. It should be obvious when you have 400 Archon stacks you are doing a lot more damage than when you have 200 Archon stacks, even though your sheet damage stays the same. I assure you, your crits will be larger, and stuff will die faster, with 400 stacks. You just don’t see that reflected in your sheet damage numbers.
Your damage increases linearly with your Archon stack count due to the Archon stack damage bonus. This bonus continues increasing even once your APS caps at 5, but it is never shown in your sheet stats (even below 5 APS).
Your damage also increases due to your attack speed increasing, up until you cap at 5 APS. Depending on your gear, this should happen once you get a little over 200 stacks, maybe a little more if you don’t have attack speed on your wand.
So your damage increases linearly with your stack count once you are capped at 5 APS, and more than linearly with your stack count below 5 APS, since it is increasing both as a linear function of your stack count due to the stack count multiplier, as well as because your attack speed is also increasing, which increases the damage of your Chantodo’s Wave as a separate multiplier.
Hope this helps clear it up.
TL;DR: it’s not a bug, your damage is still increasing. The actual main damage bonus isn’t shown in your sheet DPS. Your sheet damage just caps when you cap out at 5 APS.