“Totally broken” is a bit harsh. It usually works, but this seems like a bug. With
width: 65536,
height: 32768,
the image is not distorted.
With
width: 80000,
height: 40000,
the image is slightly distorted.
I sunk some time with debugging that, and eventually, it seems to boil down to the imageWidth being clamped to 65536 at https://github.com/CesiumGS/cesium/blob/d49c0c3b208e406e984039b03c4b96a3ab07bf8b/Source/Scene/BillboardCollection.js#L1095 for some sort of compressed storage.
(Sorry, no idea for a fix/workaround, but maybe the pointer is helpful)