The standard says characters, but most IRC clients use 512 bytes. Twitch’s limit is 500 characters excluding the new line characters. For ASCII one character is one byte, but other characters use more, some as many as 4 bytes. As such, you can have a message that’s 500 characters but 2000 bytes, which will absolutely break many IRC clients in one way or another.
Also Twitch chat is based on the older RFC 1459, although it doesn’t make a difference in this case.