So Transparency and Volume ignore the Total limit?
Yep!
Do Diffuse, Glossy and Transmission “compete” for bounces?
Nope, they each have their own rays that all start together but end up in different places depending on the material properties. So if everything, including the Total limit, is set to 8, there will be 8 diffuse, 8 glossy, 8 transparency, etc.
Spikey is right that it’s not very intuitive unfortunately.
