You are right as it is storing all data into table and checked with LEN command but in SSMS it is now showing. There is limit to 65535.

Is there...

I also change datatype to text and check the size. It still shows me 43600 characters in SSMS.

I am checking in SSMS . In ch it shows 43600 characters.

Yes data is there but its only 43600 characters. But the total size is 115000 characters.