Currently, whenever the client driver is used, there is a limit of 255 bytes for the database name. This is defined by the DRDA spec and there has been a discussion on the list / as to whether this limit should be raised due to the introduction of the new ACR that allows for UTF-8 characters.
UTF-8 characters can take up to four bytes and this reduces the limit in characters dramatically.
This should be an easy change as there is a codepoint that defines this limit.
 did not work but  did
 - http://old.nabble.com/Database-name-length-tt29691419.html