BASICS:

To try to explain in simplist terms, we only load active / nearby players who you've recently interacted with (been within 15 meters of). Hence the method GetActivePlayers in FiveM which can be seen more here https://runtime.fivem.net/doc/natives/?_0xCF143FB9. That is the only way you can loop through players on the client side, which is all his cheats can do. We set players inactive on your client to boost performance server side and client side.

THEIR ESP SAW IT THOUGH:

The only way client can loop is through GetActivePlayers, they cannot overwrite the GTAV / FiveM method. We set players as inactive, which their cheat would respect as well, as that all of the mod menus we have examined have never set players active forcefully.
Unless he's trying to explicitly target us (I doubt), and knows we set players inactive (Again, I doubt) that won't work.
It would be practically impossible for him to know we do that as well, due to the fact that all of our code is obfuscated using birthdates' obfuscator which can be seen at https://github.com/birthdates/Lua-Obfuscator

HOW WOULD ESP NOT DETECT THE PLAYERS SET TO INACTIVE:

Unless his mod menu sets them as active (I'm certain it doesn't, as the 20+ mod menus we've examined do not do so) it will not load them. The cheat is using the same client as FiveM and we are, whatever we call gets called to the cheat as well. We also run the inactive player mechanism at 1 MS delay on a new thread, so your client always be updating it. You can learn a bit more about client, server, callbacks and more here https://docs.fivem.net/docs/scripting-manual/

THEORETICALLY

Not to mention, the absolute beast of computers that would be required to run that many instances of FiveM. Personally (James), I have a Ryzen 7 3700X that runs FiveM at 30-50% CPU. We would need to spend well over $10,000 USD on PCs to even possibly spoof the 30-40 players online at the time.