The 25 KHz refers to the rate at which the timing software routines in Mach3 are running. Each time this routine runs it evaluates each axis to determine if it should generate a step pulse, so the that rate applies individually to each axis, not cumulatively for all axes.
While this number does limit the maximum speed that any axis motor can receive step pulses, it's more significant implication is how accurately pulses can be timed to produce smooth motion. For example running 50 KHz can provide timing of the step pulses that is twice as accurate as running at 25 KHz.
Generally 25 KHz is fast enough to provide step pulses faster than the stepper motors and associated mechanical systems can respond. The case where this becomes more of a problem is typically where the stepper motor drivers are running high micro-step ratios, such as 10 micro-steps per full step, and many more step pulses are needed to generate a given amount of motion. For servo systems running from step pulse commands this becomes even more problematic because micro-step pulse ratios for servos can be many times higher than for stepper motors. On the other hand, servo systems are more tolerant of timing jitter of the incoming step pulses.
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