Yes, I've been in 16-player events. There's three factors to the size of the field:
1) Event limitation - Most race events allow for a max of less than 16, which can be seen in the events details while in the online menu.
2) Host limitations - Since races are hosted by a player in the race, sometimes there's not an entrant with a strong enough connection to properly host the max number of players.
3) Participant count - If only 12 people choose an event, then the max you're going to get is, of course, 12.