You're correct the V/F is actually the control method it is using to control the motor. It sounds like you have a VFD rated motor since it can run at 200hz (same as my stock 940cnc motor I would assume). That also means that is probably better to run it in sensorless vector mode. I noticed a significant difference in torque when I switched from V/F to sensorless vector on my 940CNC. I don't have the manual with me so I can't tell you what parameters to change.
Also, they may set the max freq based on max RPM that the spindle bearings can actually handle. I've changed over to AC bearings, and run mine at 6k RPM with out issue.