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8bit MCU does not meant it only have 8bit address space.

STM8S007xx operates on 8bit words, but have 8/16/24bit address space

As others are saying, "8-bit" doesn't mean 8-bit address space. It refers to the ALU "word" size instead - i.e., how many bits you can add, subtract, multiply, or divide in a single step. (Larger types are possible, you just need to do the operations in steps, just like 64-bit math on 32-bit platforms.)

Even in the 1980s, most 8-bit microcomputers had at least 64 kB memory. Today, many AVR chips will have 145 kB of memory (flash + SRAM + EEPROM), and pretty much arbitrarily more can be installed externally.

And many 8-bit architectures allow some registers to be used in pairs.

Or have some >=16-bit registers for specific operations (eg. indirect memory addressing).

8-bit CPUs typically have a 16-bit address space though.