Were there limitations or issues with the Kaiten?

One problem was that the Kaiten could only dive to 80 meters (264 feet) while the submarines carrying the Kaiten could dive to 100 meters (325 feet). That meant that the depth of the submarine was limited by the Kaiten.  Another was that the Kaiten was often unstable and training at 40 knots was “extremely difficult” and "accidents were not infrequent.”

(“The Japanese Submarine Force and World War II” by Carl Boyd and Akihito Yoshida, page 168-169.)

Although they may have had a long range for a torpedo, the range of the Kaiten was short compared to a submarine. They had a telephone connection to the mother submarine and a gyroscope, but lacked sonar, radio and navigation equipment. That meant it was difficult for the Kaiten to be truly effective. (“Submarines of the Imperial Japanese Navy” by Dorr Carpenter and Norman Polmar, page 137.)