The way overselling works is this. You have a reseller with allocated space and bandwidth, lets stick with 100/100
Now the reseller can create account packages with unlimited space (if you allow that check box). Ok with that said, his total accumulation of all accounts under his whm will never exceed his maximum limit of 100/100 set by his main WHM.
The reseller can allocate the world if you allow it (overselling) but can not over exceed his base resources. Overselling depends on the concept that existing clients will not use all the allocated bandwidth and space of the client package, so lets put it to use somewhere else (within the limits of the original WHM reseller base accounts)
If you disallow overselling, then the package accounts need to be set in a realistic manner as the resources will be reserved and can not be sourced out.
So yes, the reseller can create hundreds of accounts as long as the accumulative total does not reach his whm resource limit.
Lets say the reseller of 100/100 created 100 1 gig accounts. He is within his limit if everyone (highly unlikely) used every bit of 1 gig given to them. If he goes above that, the ability to create accounts will be disabled and I believe his account may be suspended or clients may see errors due to disk space being used up.
Nexus does not allow overselling on its Servers.