The max activities in a feed is defaulted at 3600 according to the api docs. I am unable to find in the UI where to set this to something else. Also, what happens when the max is reached?
The 3600 limit is the maximum amount of activities you can read for a single feed via APIs. This is a hard limit and can't be increased.
The way the limit is enforced is very simple: when you read a feed, you always get results from the latest 3600 activities.