The last time i made Bulletholes was on the n3ds:D Mentioning that because it’s not that powerfull - so i had to optimize everything.
What i did was, additionally to having a lifetime variable fading the bullet holes out, i also had a maximum limit and measures to deal with overflow.
Keep your bullet holes in a list, once you surpass your desired upper limit (let’s say 100) you take the oldest in the list (new one are added on top, so oldest are the last entries) and artificially decrease their lifetime variable that is responsible for fading and getting rid of them.
Basically as you pass the max limit the oldest holes are forced to instantly fade faster. I had it set up to take away 10% of the starting livetime variabe, so that i had 110 max holes - the last 10 being subjected to the forced faster fading, getting faded 1/10th with each additional decal created.
You can of course play with how high your max decals should be, how many get forced to fade faster and how much each of those gets reduced (all the same? linear, older ones more? etc.)
Hope that gives you some idea