You position a saddle with regard to KOPS or however you feel that setup best suits your body. Everything else, stem length etc, is secondary to that.

The first part of bike fit is getting your saddle position set up with regard to your cranks (and also deciding crank length during that process). The reach is the second part of that equation. If one is going shorter and shorter on stem length to the point where it's 80 or 90 on a road bike... it's likely to small. 90 is acceptable but for most road riding something like 80 is way too short and means that the frame is too big. On the other end, it is easier to make a smaller frame fit larger if you can tolerate the drop. Going up to a 130 or even 140 stem length isn't totally ridiculous though I think 140 really indicates that you're on too small of a frame unless you have really long arms and really short legs in which case going to a larger frame could be problematic.

I usually ride a 56 frame, but I'm currently on a 'medium' frame with an ETT of 545 which fits more like a 54-55. The geometry of the frameset is slightly more relaxed overall and given the angles and the steerer tube length, I'm able to ride it pretty comfortably with a 120 stem without too much drop with the caveat that there's no way I'm cutting the steerer. I'm okay with that, but again it's a different kind of compromise.

In general I've found that I prefer to be slightly more stretched out instead of having a lot more drop. You come to find what you like over time.

TLDR: If you're comfortable keep working on your position making small changes and don't overthink it! If you're not having issues on rides that you're doing as you've started going out longer then you're in an acceptable range.