I think your observations about the possibility of having infinite inventory/infinite number of horses and how overburden penalty doesn't really stop the player are correct. I really think that a slot based inventory like in Warband would be terrible for the game though. The inventory system in Warband was one of my least favourite aspects about the game (along with battles ending after the player got knocked out and the sieges), it just limited the player too much in an unfun way in my opinion.
I would rather have a scaling cap on the number of horses we can have and the amount we can be overburdened; such as after having more than 1.5x the horses/cattle of our party's herd threshold, we start to lose a ton of horses/mules/camels/cows/sheep/hogs every day until we have 1.5x the amount of herd threshold (for clarity, let's say if we have 100 foot soldiers, and we start getting a herd penalty to party movement at 300 horse and cattle, our cap would be then 450 horse and cattle, and if we have for example 600 total horse and/or cattle, we then rapidly lose 150 of them over the course of a few days). We can have a similar application for items and 1.5x overburden threshold or something like that. I pulled the 1.5x number out of my ass for simplicity's sake and there's likely a better ratio, but hopefully you get the idea. We can also increase the weight of non-commodity items (any item besides food, production and trade goods) since we buy all commodity items at 10.00 weight (kilograms? pounds?) per piece. We could alternatively lower the minimum party movement speed to 0 as well, though that might cause other problems as well. What do you think?