Wrong, actually. Patches must be within that size (not sure about width but whatever), but textures can actually be whatever size, with one condition: the width must be a power of two (1, 2, 4, 8, 16, 32, 64, 128, 256, etc). (In vanilla Doom, height was also limited to 128 pixels tall, but that's a non-issue in SRB2.)
What I guess I'm seeing here is that you put a patch in but didn't set up the dimensions of the texture that's using it correctly. That, or perhaps you replaced a patch in an existing texture without any consideration for how it'd end up looking. As a result, your patch is too big for the texture definition, and parts of the patch are getting cut off. The solution would be to modify the texture definition to be a power-of-two wide, as well as the correct height - if you go higher than 255, divide the texture up into multiple patches, ideally 128 pixels tall. Also, if you replaced an existing texture... don't. Add a new definition to the end of TEXTURE1 and work from there.