The 4 bit stuff is a hangover from Mojang having to squeeze every bit of perf from their Java based engine that they could. Their original sound engine was so sketchy that C418's (music composer) minimalist sound is partly because it really couldn't handle much more than what got released.

MS has been loosening up on the 4 bits limit and have created a CPP variant of Minecraft which performs better, but they've also introduced their unified login garbage that has almost made me give up Minecraft completely.