Limits are imposed to retain accuracy within the 14 digit mantissa of real numbers (doubles) and the 7 digit mantissa of real numbers (floats). These limits can come into play when mixing state plane coordinates with non-state plane coordinates where it is possible to compute a value that would loose significant digits based on the mantissa size.
Limits come into play particularly in drawings where most computations are done with 7 digit real numbers (float) inherent in the output device (monitor, printer or plotter).
The coordinate limits are used to report any points that fall outside these values. If a computation is in error or if a point you import contains an improper value, the limits check may catch it for you.
Points that fall outside the limit are reported in the error log or displayed on the screen. These are generally reported in the Message View.
TPC uses the limits to determine when a point can and can't be computed. If a computed point position lies outside the limits, the point is not updated (the computed coordinates are discarded).
For instance, if a drawing is missing a very flat curve (it is not drawn) you will want to check the limits. If the radius point is outside of the limits, the curve is not computed and therefore not drawn.