Discussing the related work is expected in many (if not all?) types of research papers. In the related work section, the author explains the relationship of the current work to previous work and provides an overview of the relevant literature to readers who are not so familiar already with the research direction to which the paper belongs. As a secondary purpose, with the discussion of the related work, the author also shows that she/he knows about the field.
There are however soft limits to the length of such a section, stemming from the expectation that a substantial part of the paper's pages are used for the actual contribution. This means that only the most relevant related work can be discussed. And what is most relevant is decided by the author.
Now a common criticism in paper reviews, often combined with a rejection or request for major changes in the paper, is that seemingly relevant related work is missing. Typically, the papers mentioned by the review are related, but not infrequently at a level for which 100s of other similarly related papers can be found.
Are there strategies to defend against such criticism, provided that the related work section is quite polished?
The question is particularly relevant for work that uses concepts or builds on approaches from multiple streams of research, which all need to be discussed.
Just resubmitting with some discussed papers replaced by the reviewers' requests until the paper is accepted probably wastes reviewer and author time. Extending the related work section to cover >20% of the paper seems excessive (at least in CS in papers presenting new approaches to solve some problem) and invites criticism about a low density of novel content. Adding additional related work to a not-published appendix may look odd and invites the criticism that it should be part of the main part of the paper.