Likely the same problem described here (including solution): https://stackoverflow.com/questions/17472389/how-to-increase-the-maximum-number-of-child-processes-that-can-be-spawned-by-a-w
I would, however, not recommend spawning that many processes, rather put the parallelism to the individual devices using
for /F %i in (MYHOSTLIST.txt) do plink -pw MYPASSWORD MYLOGIN@%i "nohup sudo reboot &>/dev/null &"
which will still connect serially to all devices, but only to start off the reboot command and then immediately disconnect and move on to the next device.
Other option would be to use a proper operating system to control these Linux devices ;-)