Why does the larger iPad pro support fewer LTE bands than the smaller one? Per the official site, the 9.7 inch iPad Pro supports 23 LTE bands for a max theoretical bandwidth of 300Mbps.

..While the 12.7 inch version supports only 20, with a theoretical max of 150Mbps.



Why is the larger unit restricted in this way?
The larger iPad Pro was released before the smaller one, and presumably before the availability of a newer version of the radio used in the smaller iPad. Only an Apple employee could tell you the details of why the choice was made but I'm guessing this is indicative of a wholesale shift by Apple to use the more advanced radios in future products.

So to answer your question: the larger model wasn't "restricted" - it was released the year before the smaller model and it's likely the part wasn't available when it was being conceptualized and produced.