I have a 32GB card from Sandisk in my Clip+ mp3-player; I just put it into my PCM-M10, and all my ~30GB of music showed up fine there as well, no complaints from the M10. So maybe there is a difference between the card brands, or there is some unfortunate formatting oddity going on for you, meursault.
I would not pay too much attention to memory limits in manuals and specifications. Manufacturers usually test their new devices with the cards that are available at the time of release, and 16GB was the largest microSD when the M10 appeared, so that became the maximum capacity they could state. For example, many old Sony-Ericsson phones still have "official" limits of 2GB or 4GB despite working with much bigger cards, or older notebooks can sometimes carry more RAM than originally thought because 2GB modules only appeared much later.