In this case, nginx is simply relaying data over an active connection on each. There is an open socket between the client and nginx, and nginx and the backend,

In this case, nginx is simply relaying data over an active connection on each. There is an open socket between the client and nginx, and nginx and the backend, for every WebSocket. There is not a port limit issue, however, as nginx can create more than one connection to a local backend server using unix domain sockets. But the backend server has to then manage multiple open connections, as well, one for each WebSocket.