MEMFS limits how many files you can create (up to 1024 by default). Try running it with the parameter -n set to 100000, which will allow you to create up to 100000 files.
Examples command lines:
WinFsp: memfs -t 0 -n 100000 -m Z: # no caching memfs -t 1 -n 100000 -m Z: # enables metadata caching memfs -t -1 -n 100000 -m Z: # enables data and metadata caching
Dokany: memfs-dokany -n 100000 -m Z: