I found it confirmed on Blizzard watch.
So I readded all the people I had removed (most of whom were guildies - because I could see them in guild I figured I could just re-add them anytime I wanted), and was very excited to see that I really could get my friends number over 100.
Favourites + friends = the total number (for some reason I don't know why favourites takes people out of friends, but it does that for mounts and pets I suppose). So yay, I'm happy that I will not have to remove anyone from battle tag for a long time!
And just to answer your question, do I really have 100 friends? There are at least 100 people that I like talking to, and it's nice to be able to chat to them when I'm not in game. Some are guildies and I can figure out where they are and tell them to logon if I need them. Some are people I've met in the world and had a nice time with. Others are bloggers and people I've navispammed. Either way, I find it difficult every time I delete someone, because I wish I could talk to that person again, but now I won't have to worry about that since I don't think I'll be hitting 200 any time soon.