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I'm not sure how you can extend the row limit in Excel (although FWIW I remember it used to be 1M rows, but that may have changed). That said, if you are already using python to convert from XML to Excel, then perhaps you can skip the Excel step altogether by using the Extract API - Tableau. The idea would be that you can convert the XML directly into a Tableau Extract (.hyper for example) in your python script.
The documentation has a few examples on how to use the Extract API, including some in python: Extract API 2.0 Samples - Tableau
Hope this helps!