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1. NO and YES. If you use GD2 no you can not prevent it. If you use Imagemagick then this normally is not an issue. There are many threads here on php memory errors and the like so no need to rehash discussions already here.
2. If the options for that user say unlimited then you have set no such limits on his usergroups as far as diskspace filesize etc thus his limits are unlimited meaning no limit.
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