AFAIK, yes you can allocate as many vCPUs as your host actually has CPUs.
vCPUs are actually threads so in fact, the KVM controller maintains the balance on the host in such a way that a VM will not be able to consume resources on the host to the point that PVE processes are limited or challenged.
This is the fundamental working of any hypervisor, to avoid a deadlock situation on the host & its OS.