multilevel systems. Being experimentally controllable with high fidelity, the higher excited states beyond the qubit subspace provide an important resource for hardware-efficient many-body quantum simulations, quantum error correction, and quantum information protocols. Alas, dissipation and dephasing phenomena generated by couplings to various uncontrollable environments yield a practical limiting factor to their utilization. To quantify this in detail, we present here the primary consequences of single-transmon dissipation and dephasing to the many-body dynamics of transmon arrays. We use analytical methods from perturbation theory and quantum trajectory approach together with numerical simulations, and deliberately consider the full Hilbert space including the higher excited states. The three main non-unitary processes are many-body decoherence, many-body dissipation, and heating/cooling transitions between different anharmonicity manifolds. Of these, the many-body decoherence — being proportional to the squared distance between the many-body Fock states — gives the strictest limit for observing effective unitary dynamics. Considering experimentally relevant parameters, including also the inevitable site-to-site disorder, our results show that the state-of-the-art transmon arrays should be ready for the task of demonstrating coherent many-body dynamics using the higher excited states. However, the wider utilization of transmons for ternary-and-beyond quantum computing calls for improving their coherence properties.