I'm not sure how this works but from no mention of it being limited to 4, it's probably some sort of software mechanism; OllyDbg hardware breakpoints use debug facilities of the hardware that have been there since the 386:

https://en.wikipedia.org/wiki/X86_debug_register

The limitation of hardware breakpoints is that there are only 4 available, but it causes less disturbance than replacing instructions with int3s.