Lookup on lists over 5,000
Lookup Columns that go to a list that contains more than 5000 items does not work even if that list is indexed. Indexing allows users to see items in the list in a normal view, but when trying to do a lookup to that list from another site or library, there is no filtering applied. It would be nice if some filtering could be applied to the lookup feature to help narrow the results shown in the lookup.
Brian Mair commented
This is my #1 show-stopper when it comes to building real-life application solutions with SharePoint Online. I understand the rational behind the LVT, and appreciate the workarounds provided such as the use of indexed columns with filtered list views, but the same workarounds should be available with lookup columns that would also work well with a filtered list of items. A people-picker style selection method would surely enable smart queries on the data.
Andy Dale commented
This is the problem I am facing as well