"Limit Output" extension makes "ipywidgets Output widget" stop working

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The code below is copied directly from ipywidgets documentation. When I tried it, I got no output. After a lot of trial and error I've discovered that the cause is definitely the "Limit Output" extension. When I disabled it the code worked and it prints hello world as expected.

import ipywidgets as widgets
out = widgets.Output()

with out:
    for i in range(10):
        print(i, 'Hello world!')
out

The images below show the results before/after disabling "limit output" extension.