`set t_Co=16` in vimrc file has no effect

Hello all,

I've stumbled upon strange behavior in Vim 8.2 regarding `t_Co`
variable. This might be a bug, but more probably is just a case of
PEBCAK, so maybe someone could point me towards what I'm doing wrong.

Background: I want to use my terminal emulator (which is plain old
`xterm`) color scheme across all TUI programs, including Vim. I've
added `set t_Co=16` to my `.vim/vimrc` file and expected Vim to limit
itself to 16 base colors (at least this is what all sources on Internet
say to do, which I managed to find). However, it appears that Vim does
not honor my will and resets `t_Co` to 256, unless I manually type `:set
t_Co=16` in command-line mode.

I reduced my `vimrc` to the bare minimum needed to reproduce the
problem, and now it contains a single line:

set t_Co=16

At this point I'm unsure what to do and ask for your assistance. I
attach a log captured by running `vim -V100vim.log` as well as version
info (`vim --version >vim.version`), and I'm willing to provide any
other info that may be of help.

Best regards,
NB

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