App user count is applicable only for App Supervise feature and Not applicable if you are using App Scan/Shield. 

App Supervise, requires app's active user count (MAD) for tracking app user analytics, diagnostics  and for real-time threat reporting.  

MAD - Monthly active device is number of active users using the app in given month

Will app protection still works after crossing the Max user count?  Yes, Quixxi app protection will still works.

Only reporting in Quixxi dashboard (Supervise feature) will not work when the user count reaches the max numbers based on the current plan. (You can check plan details here: Link)