The 3 DP limit is a hard cap that cannot be exceeded. However, Targeted Allocation Money can be used strategically to buy down a player's cap charge to below the DP threshold, effectively freeing up a DP slot.
Some teams have converted DP contracts to TAM contracts mid-season to open a slot for a new signing. This flexibility, combined with the U22 Initiative and Young DP provisions, gives front offices multiple tools for building rosters that include more high-quality players.