Core issue
The %MGMT-5-LOGIN_FAIL:User failed to log via Telnet - max attempt reached error message indicates that a login attempt failed. This error occurs when the maximum number of telnet connections is exceeded.
Resolution
If the number of Telnet connections exceeds the maximum limit, restrict the number of users allowed to connect to the switch through Telnet.
Also, check whether Cisco bug ID CSCed45576 is applicable, where the Catalyst OS (CatOS) switch prompt does not appear when Telnet is used from certain Telnet clients. As a workaround, hit the Return key to see the Telnet prompt.
For further assistance and support, open a service request with Cisco Technical Support.