I haven't used PowerISO for some time so I may be wrong but I remember that when you create an ISO you had to specify which filesystem to use out of three options, and I think two of them had support for only 16 character labels and one of them had support for 31 or 32.
Sounds like the person who made the ISO you're editing now picked one of the first two so it looks like you're stuck with the 16 character limit unless you change the ISO's filesystem which as far as I know is impossible, or at least I dunno of any program that does that

You could always extract the files from the ISO and rebuild it with a different filesystem that supports more than 16 characters in the label and you're done.
I'd stick with cutting a few letters off lol but if it's worth the time, then I guess you could do that.