First, you understand that 'e' here does not mean 2.7..., right? It's just the label being used for a variable.
In the text you posted, it stands for the extension of the spring when the mass is hanging at equilibrium. When oscillating, the displacement x is relative to that equilibrium position, so the total extension of the spring is e+x.
I do not see anywhere in the text that says x cannot exceed e, so I assume someone else said this. Suppose it does. In SHM, if the displacement is at times x then at other times it is -x. So if x can exceed e it will also happen that the total extension can go negative. Whether that's a problem depends on the type of spring.
Many springs have an 'open' relaxed state. That is, they are capable of being compressed by some amount c before becoming closed up. For other springs, c = 0.
SHM should occur provided x does not exceed e+c.