What is the point of setting an upper limit in Auto-ISO?

Auto-ISO setting typically has two components: minimum shutter speed and maximum ISO value.
I do not understand the point of having an upper ISO limit lower than the maximum ISO value.
In A mode, hitting the upper limit will cause the shutter speed to fall below the safe value, causing blurred images. In M mode, hitting the upper limit will cause the EVF to become too dark, making framing and focusing hard.

I completely agree, my three Auto-ISO presets (Fuji) are pretty much always set with base ISO to ISO 12800 limits and a different minimum shutter speed for each one. If I want to “underISO” a bit for some extra highlight headroom in very dynamic situations, I can easily just dial in some negative exposure compensation as needed.

Headroom. Use EC with A mode.

Because, for example, in A-mode camera automat prefer to increase ISO to maximum noisy value, instead of decrease shutter speed.
In low light condition if you shoot static scene, for example city architecture at night light, it s better to shoot at 1/20 with ibis or tripod than shoot 1/60 at iso12600

Why would headroom be important at an upper limit only (e.g, ISO 6400), and not below?

If you shoot a static scene on tripod, like city architecture, you do not need auto ISO. You need auto ISO when you have to keep certain shutter speed like shooting action or any moving subject and light is changing.
To the OP, I also keep auto ISO at maximum.

My cameras (550d and A6000) are very noisy above ISO 1600, so I just HAVE to set a limit. And I do it, using Auto ISO most of the time (excluding times, when I use a tripod and longer exposure).

there might be some things starting after some ISO - for example extra in camera NR for raw data, switch to ISO-by-TAG, etc - that you might want to avoid for whatever reason...

I assume that the minimum acceptable shutter speed is already set in the Auto-ISO setting. Therefore, when the upper ISO limit is reached, a decrease in shutter speed should cause blurry images.

It's important all the time, but the tradeoffs necessary to obtain it get less as ISO setting increases.

What happens when you hit the ISO limit? Either the shutter speed goes below the acceptable limit, or the image becomes darker and noisier as the noise issue is caused by low exposure and not by high ISO.

I typically set up to -2 EC to increase highlight headroom above the DCG point. Adding additional headroom when hitting the ISO limit seems unnecessary and makes focusing and framing difficult.
Others may not set headlight headroom early (negative EC in Auto-ISO), and an upper limit of 3200 or 1600 can make sense in M mode.
But we agree that it makes no sense in A mode when the lowest acceptable shutter speed has already been set.

If you've cranked that in as a matter of course, then you're right. You don't need more for normal scenes.

Probably right. I don't use auto-ISO at all.

If I need shoot action, than I use S-mode and Auto ISO with upper limit.
If I need static scene and\or certain DOF than I shoot A-mode and Auto ISO with upper limit
Also different camera has different matrix, different automats algorithm and different ISO quality.
Especially crop cameras need to limit upper ISO value because quality at ISO 3200 or 6400 is not good at all, but automat can set unusable ISO 12800 and more.

Do you consider this image unusable?

Image is good for me, but scene has good light, and thats more important than high ISO.
I never shoot Nikon, but if I am shoot this scene with my sony APSC I prefer to choose 1\25 and ISO 3200

Increasing ISO has no detrimental effect on image quality. However, the lower exposure (shutter speed and aperture) causes degradation (noise). If your shutter speed and aperture stay the same, the image will have the same noise at ISO 1600 as at ISO 6400.