All I could find was an old thread from 4 years ago on this topic that was locked when I was looking for info regarding this about a month or so back and there was a brief argument about the way Microsoft has it listed as being 16TB.
I can give a more concrete answer to this question.
It appears to be a max individual drive capacity of 16TB per drive and not in over all total.
This conclusion has been reached as my console currently has a total of 25TB attached to it. ( 3x 8TB VIA a powered USB desktop enclosure and the 1TB internal drive.)
What appears to be the case is that the max number of physical drives that the console can handle is 4 drives (including the internal drive).
This I found out by having the extra 3 drives connected by the rear USB ports and then plugging another drive via the front USB on my XBOX ONE S. When this is done the console displays a pop-up warning saying there is too many storage devices attached and to disconnect one of them in order to use the new storage device. So this maybe a limitation of the XBOX OS software.
With this in mind one could have 3x 16TB drives connected to an XBOX One S (likely X as well though I don't have one to test this theory) so if anyone needs 48TB of external storage for you digital games...well you can...I guess...if you want lol.
See the attached screen shot of my storage as it is currently configured for confirmation of that you can have more than 16TB total attached to your console.