It is my understanding that when textures are loaded onto graphic cards the widths and heights must be power of two values: (2, 4, 8, 16, 32, 64, 128, 256, 512, 1024, 2048, 4096, 8192, etc....)
It is also my understanding that the width and height do not need to be the same. If you loaded a 512x1024 texture the graphic card would store it in a 512x1024 space. Where as if one of the values were not a POT, they would be expanded, so if you tried to load a 600x1024 texture then that texture would be stored in a 1024x1024 space.
It's not an intersect limitation, Intersect should support well over 8096x8096, but textures larger than 2048x2048 can be very hard for some graphic cards to handle. It depends on the power of your players' systems.
It is system dependent, and I haven't personally experienced problems resulting of large tilesets before. (Just heard of them) You will have a surprising number of players with low end (sub $200) amd laptops from walmart filled with bloatware that want to play your game, and it's those players who you'd potentially lose if your tilesets are massive and their low end gpus can't handle the pressure.
Either shoot for 1024 height or go all the way to 2048.. if your tilesets are 1200px in height most graphic cards will allocate those tilesets in memory as 2048px in height anyways, so you might as well make use of that space.