No, it's an issue with DOSBox, most likely related to the 64MB memory limit [1]. If I play the levels are typical offenders of the "too many objects" bug, it does not occur on my Win98 machine (P3 600 with 256MB ram) I played through more than half the game on my Pentium 133 in highres back in the mid-90's, shortly after it came out, where it also didn't occur.

The problem is more related to not many people bothering to complete all 50 levels of the game. Most people I knew who played it when it came out only played maybe 10 or 20 levels before they packed it in. It is a LONG game.

I will add though, that the game doesn't lock the frame-rate, meaning on my P3-600, it's on the verge of playing too fast. One benefit of DOSBox is the speed can be controlled easily.

EDIT :
[1] - Scratch the memory limit theory. DOS4G only supports up to 64MB of memory.

So it's a DOS issue, rather than DOSBox. If you run it on Windows (back in the old Windows when it was compatible), then it doesn't happen on high res or low res. If you run it on DOS, it will happen on high res, but not low res. I suppose by the time computers were powerful enough to run it on high res, most users were running it in Windows.

I know. I just thought the game might have come in a separate 16-bit Windows version, and it's that version which didn't have the bug. If you say it's not the case, then ok.

Win98 can run DOS games without leaving the interface (It can also boot down to pure DOS with a custom Autoexec.bat/config.sys for each shortcut; very convenient, but often not needed). No, there's no Windows version, sadly. That may alleviate a lot of issues. What I'm getting at is when run natively rather than through emulation, it does not have the bug. Which implies that the problem is a nuance of DOSBox that isn't emulated 100% correctly.

I had actually been playing the game, out of convenience, on my main system using DOSBox. But I encountered the bug there, which I found baffling, given my previous experience. After looking online at the DOSBox compatibility list, Vogons, and here, I saw that it was a widespread problem. I know the game fairly well, and I distinctly recalled playing it a long time ago with no perceptible issues, so, to confirm, I copied my save over to my Win98 machine and proceeded to play. Levels where "population control" were the only viable means of beating the level on DOSBox didn't require any additional consideration on them in Win98.

I played far into the game on that machine (some level in the 30's) and occasionally looked in to see if there was any solution to the bug (outside the lowres switch which I've seen mentioned), but, unfortunately not. So, I can only conclude, by raw deduction, that it's an issue with DOSBox itself.

DOSBox does a great job about 95+% of the time. But, games on the cusp of Win95 were more demanding and DOSBox's reliability there is a little more spotty, with Magic Carpet being one of the games. Maybe someday we'll get a DOSBox 0.75 which will fix some of the bugs.

This makes me wonder... has anyone tried Magic Carpet in another fork of DOSBox, like DOSBox-X?

OK, it does seem like a DOSBox problem then.

I might give this a try if I have some free time.