The prototype is a first version of a design/device. With it you can test the interactions with the user and determine early weaknesses and improvements. You can use a prototype in two key dimensions: for filtering or as a manifestation. A prototype can generate new ideas but also be used for communicating/expressing thoughts.
Personal experience/thoughts:
Somehow for me every product on the market is a prototype. Because as I realized in this module: your end product might be looked at as a prototype of someone new or better version. So to answer the question it's hard to tell where the prototype ends. I would say it has no limitation.