I-type register format maximum size of a constant
In the MIPS architecture, the immediate field of I-type instructions is a signed 16-bit value in two's complement. One of those 16 bits is the sign bit, the other 15 remain for the magnitude.

Therefore, the range is -2^15 (-32768) to 2^15-1 (32767); that's still 2^16 different values in total.