Balancer and Curve leverage vaults enforce a maximum pool share parameter that limits the amount of a pool's LP tokens that a strategy can hold. For example, if the wstETH/WETH pool holds $100M in liquidity and the maximum pool share is 10%, then Notional users can only enter the strategy if the total value of LP tokens held by the vault is inferior to $10M.
The maximum pool share parameter allows the protocol to effectively cap the maximum amount of liquidity tokens it holds in a given pool. This parameter helps mitigate the liquidity risks associated with converting LP tokens back to the primary borrow currency.
Moreover, if a pool's liquidity ever decreases substantially, the Maximum Pool Share will stop new users from entering the vault if the cap is already reached. This mitigates the risk that vault shares redemption slippage becomes too high.