So I'm using this mod alongside Pyanodon, but it results in an ungodly amount of resources getting stuck machines, well above their automatic insertion limits.

For exemple, a machine that would normally store 21 copper wires, roughly 10 plates, now stores 1000 wires, AKA 5 stacks, and 500 copper plates.
Meanwhile an electric furnace will buffer up to 500 ores, way more than inserters normally insert.

So it would be very nice if there was a setting to limit the loaders to only insert as much as inserters normally would.

Yes it would. :D This is an engine mechanic that I don't have any control over unfortunately.

https://forums.factorio.com/viewtopic.php?t=130399
https://forums.factorio.com/viewtopic.php?p=668370#p668370

Seems the newest patch notes heard you!
https://forums.factorio.com/130450
"Added LoaderPrototype::respect_insert_limits."

Huzzah!

I guess I should note that some people like the old way, so I agree with the idea that it would be a "setting" that loaders would respect limit. As for what the default should be? Honestly not sure. Personally I think true, but due to how long it's been the other way, some people might say false.

Particularly this issue presents itself when cranes are installed. So maybe having a description next to the setting that would say "particularly helpful when cranes are installed to prevent huge amounts being inserted into buildings from loaders"

I did decide to leave the default as false. The option is now there (provided you are running 2.0.65 or later).

Yay!

Just wanted to say a big thanks for that setting!
Its a huge help (playing py too, and that was some expensive stuff being put into machines!)