It's only limited by the software. Although Workbench doesn't allow you to move the mouse with the second mouse by default, I'm sure there are patches to switch control over to Port 1 from Port 0, which would be useful for people with busted ports. From the first version of Workbench in 1985 however, it was possible to move the pointer with more than one mouse at the same time if the software allowed it. For example, if you plug a USB mouse into a Subway in an A600 you can move the cursor with both the USB and standard mouse, and have a tug-of-war with them even. Windows finally received support for this in 1998 (one mouse pointer controlled by two or more mice).
Some Amiga games support two mice, in Port 0 and Port 1 at the same time, and allow two players to play the game with mice. Settlers for example allows two people to compete using their mice over a split-screen display.
