Aren’t there limitations to this type of guided discovery learning?

Certainly. There are significant limitations, just as there are with any other pedagogical approach. MLA are typically single semester, terminal courses. As a teacher you have one shot, one semester/quarter to do something significant. Other courses are part of a continuum where specific curricula, skills and abilities are expected to be reached in specific courses. This needs may be at odds with the structured, guided discovery approach used here. For MLA courses, this approach is remarkably effective for its particular audience.