If Nicomenthyl is neither irritating nor sensitizing, why can’t it be used at higher concentrations (i.e. 10, 20, 30% or more) on the skin?

Because such high concentrations are useless and needless. For concentrations higher than those recommended, the amount of niacin released into the skin by the hydrolyzation of menthyl nicotinate could produce a vasodilation (niacin-flush) much stronger than necessary, and that result could be bothersome though still not dangerous.