If you search for the max_characters keyword in the Mastodon Github repository, you will see that it all points to the value within the StatusLengthValidator and a variable called MAX_CHARS.
MAX_CHARACTERS_LOCAL = 255
To modify it, first, ssh into your Mastodon server, and switch to the root shell:
sudo -s
Then, switch to the Mastodon user
sudo -u mastodon -i
or
sudo -i -u mastodon
Now, modify the validator file:
nano -w PATH/live/app/validators/status_length_validator.rb
At the very top of the file, you will see the MAX_CHARS variable, which was by default 500, you can modify it to another integer, for example 3000 to allow a maximum of 3000 characters within each post.
class StatusLengthValidator < ActiveModel::Validator
MAX_CHARS = 3000
URL_PLACEHOLDER_CHARS = 23
URL_PLACEHOLDER = 'x' * 23
One can do this manually via vim/nano file manager as well:
nano -w PATH/live/app/validators/status_length_validator.rb
Instantly restore ownership back to the mastodon user:
sudo chown mastodon:mastodon PATH/live/app/validators/status_length_validator.rb
One can also alternatively run the nano file as a mastodon user instead:
sudo -u mastodon nano -w PATH/live/app/validators/status_length_validator.rb
Exit to root shell and restart the Mastodon processes, or simply reboot.
exit
systemctl restart mastodon*