ETSI defines which frequencies can be used in what way. The RX2 frequency (869.525 MHz) can be used with +30dBm EIRP maximum at a 10% dutycycle. So high-SF messages are usually moved to RX2 window since it means the gateway is allowed to transmit more of those (as the dutycycle on Rx1 is 1%).
That’s indeed the right document, thanks for linking it. I don’t really know how to calculate the dBm from the mW unit, but it’s somewhere around 30dBm, that’s what I remember. So yes, 29dBm should be right at the edge of what’s allowed.
To get back to your original question w.r.t. noise at SF12/TX29: that is indeed a known problem and overkill in most situations - there’s a valid reason why TTN promotes SF9 for Rx2 as that is usually plenty at TX29 to get the downlink delivered.