This all stems from a change Exim made from Exim 4.94 to Exim 4.95.Maybe the current limit of 2048 is still too small or it's not used for some reason by php forms. Exchanges uses a limit of 8000. However, it's odd that the issue did not occur before and suddenly start appearing after upgrading to this new version.
Prior to Exim 4.95 - Exim did not enforce RFC 5322 2.1.1 - and really, no MTA enforces RFC 5322 2.1.1 (or at least none that I'm aware of).
Now, who is right and who is wrong? This is a prime example of what happens when you start bending the rules - the rules start to not matter and you're left with a proprietary mess of nonconformity.
Ideally, all MTAs would have strictly follow all of the RFCs for SMTP from the start - meaning that the 998 character limit per line would have always been enforced, and none of us would be any wiser. On the flipside of it... since seemingly nobody has ever enforced this limit... does this prove that the need for the limit really doesn't affect anything, so why have it?
For me, the real-real answer to this, is for the RFC to be rewritten so that RFC 5322 2.1.1 is not needed. Unless someone can point out an issue with having SMTP lines that are longer than 998 characters.