Actually, this isn't true. All variables in a program (in any language) are treated the same way - their max length is the same, regardless of whether they are located inside or outside of functions.

External names have always been limited to 5 letters

External variables are processed using "name mangling", a technique that reduces name sizes.

The full text of external variable names must be placed directly in the compiler's symbol table, and, as result, the number of characters must be limited.