Update diff docs regarding where limits are applied

What does this MR do?

Update diff docs regarding where limits are applied

What are the relevant issue numbers?

Does this MR meet the acceptance criteria?

• Changelog entry added, if necessary
• Documentation created/updated
• Tests added for this feature/bug
• Conforms to the code review guidelines
• Conforms to the merge request performance guidelines
• Conforms to the style guides
• Conforms to the database guides