How does Attachment Library Repository File Limit Size work

Document ID : KB000102403
Last Modified Date : 05/07/2018
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Even if the File Limit Size is set at 50MB, it allows uploading a file much higher than 50MB in file size. Why is this permitted?
SDM enforces the File Size Limit on the compressed file and not the uncompressed version of it.

For example, if a file test.txt of size 60MB is being uploaded, compressed it might just be 1MB in size.  So SDM would allow you to upload the file.
Additional Information:
SDM uses gzip algorithms to compress files.