The AA converter was designed to handle primarily the various AA voltage range. It starts from 0.8 volts which is considered dead for any AA battery. A fully charged or unused AA primary starts from 1.2 right up to 1.8 volts for the lithium variant. So this is where the converter will work best.
But if you so choose to run a 4.2 volts 14500 rechargeable or even a RCR123 rechargeable or even a CR123 primary, the converter will accommodate. As Don said, anything above 3 volts will be wasted in generating more heat rather than lux out the front.
Despite the ability to take a 4.2 volts, it does not negate the primary function of efficiently running AA battery types.
If you have wanted to primarily use a RCR or CR123, Don's 3S model sells for the same price. So it is a matter of choosing what works for you.