The spring is not limiting up travel, but it is preventing you from fully cycling the suspension to bump.
Let's say it takes 100lbs to compress the spring 1" and the spring rate is linear. In that case, it would take 200 lbs to compress it 2". At some point, you run out of force to keep compressing with the vehicle weight, such as you have in your photo. That's why you have to remove them to check for interference. It's practically impossible to fully compress the spring with the weight of the vehicle and a jack or a mound of dirt. If that weren't the case, you would bottom out all of the time.
edit - remember that when you are driving, you encounter dynamic forces. In those instances you can apply more force than the vehicle's weight, reaching bump. When you're testing with a jack or uneven ground in a static situation, you are not encountering dynamic forces and you will not overcome the spring resistance.