Mojang announced that the new height limit would be 320 blocks in 1.17. I tried building to that height but it said "Height limit for building is 255". Mojang lied.
Video of the height limit lie is here.
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We're tracking this issue in MC-223144, so this ticket is being resolved and linked as a duplicate.
That ticket has already been resolved as working as intended, which means this is not considered a bug and won't be fixed. Please do not leave a comment on the linked ticket.
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Duplicate of MC-224273. https://www.minecraft.net/en-us/article/a-caves---cliffs-announcement