I don't think there is much of a problem with big directory names since I installed it under the full name of Transport Tycoon Deluxe on my home PC and it worked fine for years.
I do know, however, that some old programs have big problems with complete directory names which are way too big. Like, for example, c:\documents and settings\all users\documents\Transport Tycoon Deluxe\Transport Tycoon Deluxe\ ... Then yeah, it might be a tad too long for an old 16 bits game.
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