If you attempt to upload the attached file to the resources tool and then expand it (click on actions on the file) nothing happens. No warning, no files created.
In the logs there is a line that says:
2014-02-11 14:07:14,823 WARN http-bio-8080-exec-4 org.sakaiproject.content.impl.BaseContentService - Zip file for resource (/group/6edbb20a-da6c-42e9-9691-3c3944fa3c00/folders.zip) is too large to be expanded, size(1001) exceeds the max=(1000) as specified in setting content.zip.expand.maxfiles
if we're going to impose limits we should explain to users when they hit them.