When are Bitcoin transaction outputs generated more than two?
Bitcoin inputs and outputs are only limited by transaction size. There are  scenarios when you may see a few inputs with many outputs, such as an exchange performing many user withdrawals in a single transaction.

Conversely, you often see transactions with hundreds of inputs, and very few outputs. These are also usually exchanges, or people/companies with lots of receiving addresses, combining the utxos into a handful or large utxos (usually to a cold wallet).