Is this really true, i.e. does it enforce this limit? If not, what
happens? In the simplest possible implementation the low
priority threads will be starved?
It's not enforced ... so you can enable more than 4, but here be dragons and it can get a bit weird!!
The low priority group will be scheduled at least every 5 slots, and the members of group will round robin within that.
So in the case of 7 priority and 1 normal, you'll get priority inversion.
P0, P1, P2, P3, L5, P4, P5, P6, P0, L5, P1, P2, P3, P4, L5 etc..
So the normal thread will get 500/1 = 100MHz and the others will get 400/7 = 57.14MHz
Note. MHz as MIPs is starting to get a bit inaccurate now..