When a reseller is owned by 'root' (as opposed to being owned by themselves), the way limits for that account function is literally no different than how a regular non-resold account functions. Just in the sense that a non-resold account on your server can't boost their own limits, a reseller that doesn't own their own account can't boost their limits. For these exact same reasons, the limits that are set on the account do NOT count towards their reseller usage limits. This is because you told WHM that it's not owned by a reseller, but owned by 'root'.
If a reseller owns their own account, then their limits DO contribute towards their overall reseller usage limits. They also have the ability to upgrade/downgrade the account at will (as long as it continues to obey their overall reseller usage limits, just like any other resold account).
Perhaps a quick example may help further illustrate.
[ RESELLER 1: bob ]
'bob' owned by: root
Overall Reseller Limits: 10GB disk; 100GB bandwidth
'bob' limits: 5GB disk; 50GB bandwidth
In this situation, 'bob' can NOT change any of their limits for the 'bob' account. This means they can not increase/decrease their 5GB/50GB limits. It's literally as if 'bob' is a regular shared hosting account and they do not have control over its limits. For that same reason, WHM considers the 'bob' reseller as allocating 0GB disk / 0GB bandwidth. They still have 100% of their reseller allocation to work with. The 'bob' account is its own separate limit unrelated to the reseller limits.
[ RESELLER 2: john ]
'john' owned by: john
Overall Reseller Limits: 10GB disk; 100GB bandwidth
'john' limits: 5GB disk; 50GB bandwidth
In this situation, 'john' is considered to be his own resold account. Therefore 'john' can increase/decrease and perform any other modifications to the 'john' account as long as he never breaches the overall reseller limits set forth. Accordingly, WHM considers the 'john' reseller to have allocated 5GB disk; 50GB bandwidth and thus only has half of his overall reseller limits left to 'spend' on his client accounts. As mentioned, though, 'john' is able to decrease/increase the 'john' account limits to free up more of his overall reseller limit allocation if he wants.
The above behaviors are intentional, as some providers like to give their reseller 'main' account a bit of extra "free" space that doesn't detract from their overall reseller limits. Others, however, want all consumption to be within the reseller's usage limits and thus have them own their own account.
Does this help clarify? The important thing to remember is that, regardless the situation, they can't circumvent the limits for their accounts. Either they can't change anything at all because they're 'root' owned, or they can't exceed the limits you set for the overall reseller if you have them own their own account.
