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There are some raised panel bits that were made in 1/4" shank that were meant to cut about 1/2" deep x 1 1/2" high but they should be used very carefully with numerous light passes to get to depth. I've used 3/4" in 1/4" shank but also with care and not too much depth per pass. I have broken a 1/4" shank or two in the past. 8mm has about a 30% larger cross section so I would agree with Pat that about 32mm would be the max and should be used carefully.
It does sound a bit like he was trying to part you from your money.
It does sound a bit like he was trying to part you from your money.