I don't find a limitation for the number of characters per se, but there is a file size limitation of 32 megs. There is also the temp file created, he may be running into a size limitation. What happens if he saves between deletions? Also, a thought, even though Master Documents don't work very well in Word 97 (or 2000 for that matter) he might want to consider breaking the document into chapters and using something like RD fields to develop Table of Contents etc. IncludeText is another useful tool.
This article has the specs for Word 97:
http://support.microsoft.com/support/kb/articles/Q168/8/04.asp
(There are no spaces)