Are bibliographies/reference lists generally included in page/word counts?
Should not count.

A six-line main text can pack more convincing arguments compared to a one-line main text. That's why it's important to make sure all students have an equal share of area or real property to build upon.

A six-line citation does not necessarily bring any advantage compared to a one-line citation. For that reason, I don't see why we should penalize students who had identified some information with more authors or a longer title; that is not how we teach them to examine the credibility of a paper.

If you're concerned about them citing too many things or citing mindlessly, you may put a limit on the number of citations like some journals do. However, I wouldn't include them in the word count.