This is a known issue with QC / ALM 11.50 GA release. This issue has nothing to do with the number of defects exported. The issue is the size of the data that is being exported from the database fields and placed into the Excel spreadsheet cells. If there is more than 32 KB in a database field then you will receive the error when you export the defects. In QC / ALM 11.52 Patch 01 and beyond QC / ALM now truncates the information being exported when there is more than 32 KB so you do not receive the error and export will complete.
The 32 KB limit is a Microsoft Office Excel limitation. Excel spreadsheet cells can only 32,767 characters. I have included a link to the QCCR from HP an article on Microsoft's Support Site that lists the limitations of Excel.
https://softwaresupport.hp.com/group/softwaresupport/search-result/-/facetsearch/document/LID/QCCR1J62695
Total number of characters that a cell can contain - 32,767 characters
https://support.office.com/en-nz/article/Excel-specifications-and-limits-16c69c74-3d6a-4aaf-ba35-e6eb276e8eaa