AD Softcap?

Hey me and my friend were talking and he stated that AD seems to "cap" at ~250 meaning that then you attack a champion with over 250AD that you deal less because of a like a "diminishing return" or something. he couldn't really explain what that DR was just that its there. so i brought up that Jhin exists with 700AD to which he said its because his passive allows him to break it. so i used someone like twitch or Ashe and if they get 350AD then they would do more damage but he still said no because the "cap" is 250. my question is simply "is there a cap on AD?"

Too give an example imagine two exact champions one with 250AD the other with 400AD. both have no armor whatsoever and are level 1 with 450 health, when the two champions hit each other the one with 400AD will do around the same damage as the one with 250AD .

When i told him that i believe the 400AD (the example above) would he then asked why then do ADC's dont all build full attack damage then. My response being they have to compensate for the enemy team like getting armor pen for armor, GA for the assassins, quicksilver sash for the cc mage/support. He replied with thats stupid because you could just get a ton of AD and nothing will matter. I said no it does matter because resistances BUT if you look at it flatly 65% of 250 is smaller than 65% of 400 (the 65% being the targets resistance) therefore you would hit harder But he says no because the "softcap" or "DR" takes place.

Then he gave the same example as before only the champs are now level 18 with 1.3k health and asked if both champions crit which one will kill first. Again i say the 400AD because 200% of 400 is 800 so hit the enemy 1.625 times (not literally but you know mathematically) and you win where as 200% of 250 is 500 so hitting the enemy 2.3 times. again he would say "DR" or "softcap" and the two would deal the same amount of damage.

I DONT KNOW! Personally im a bad unranked pleb but never in my life have i heard of this AD "DR"/"Softcap" so now im just wondering if it exists and have you ever come across this?

TBH i wanna be right one cause i like being right and two cause it sounds stupid.